Fabrinet is a provider of advanced optical packaging and precision optical, electro-mechanical, and electronic manufacturing services to original equipment manufacturers of complex products, such as optical communication components, modules and subsystems, industrial lasers and sensors. The company was founded in 1999 and is based in George Town, the Cayman Islands.
FN Price Forecast Based on DCF Valuation
DCF Fair Value Target:
Below please find a table outlining a discounted cash flow forecast for FN, in which we model out valuation assuming a variety of terminal growth rates. To summarize, we found that Fabrinet ranked in the 26th percentile in terms of potential gain offered. We should note, though, that all scenearios modelled for this stock suggest it is overvalued. The most interesting components of our discounted cash flow analysis for Fabrinet ended up being:
The company's debt burden, as measured by earnings divided by interest payments, is 40.17 -- which is good for besting 88.52% of its peer stocks (US stocks in the Technology sector with positive cash flow).
The business' balance sheet suggests that 3% of the company's capital is sourced from debt; this is greater than merely 10.36% of the free cash flow producing stocks we're observing.
FN's estimated cost of debt, based largely on its market capitalization and its interest coverage ratio, is 2%; for context, that number is higher than 47.91% of tickers in our DCF set.
Terminal Growth Rate in Free Cash Flow
Return Relative to Current Share Price
For other companies in the Technology that have a similar discounted cashflow valuation profile (and ensuing price forecasts) as FN, try ASML, ENTG, HMSY, INFY, and TEL.
Fabrinet (NYSE:FN) is scheduled to announce Q4 earnings results on Monday, August 17th, after market close.The consensus EPS Estimate is $0.70 (-30.0% Y/Y) and the consensus Revenue Estimate is $386.86M (-4.5% Y/Y).Over the last 2 years, FN has beaten EPS estimates 75% of the time and has beaten revenue estimates...