GAIN Capital Holdings, Inc. provides trading services and solutions to retail and institutional customers worldwide. It offers access to a range of financial products, including spot forex, precious metals, spread bets, and contracts for differences on commodities, indices, individual equities and interest rate products, and over-the-counter options on forex; and exchange-traded products, such as futures and options on futures to retail customers through FOREX.com, as well as through introducing brokers and white label partners. The company was founded in 1999 and is based in Bedminster, New Jersey.
GCAP Price Forecast Based on DCF Valuation
DCF Fair Value Target:
Below please find a table outlining a discounted cash flow forecast for GCAP, in which we model out valuation assuming a variety of terminal growth rates. To summarize, we found that GAIN Capital Holdings Inc ranked in the 78th percentile in terms of potential gain offered. Moreover, under all the scenarios we modelled, the output consistently forecasted positive returns. In terms of the factors that were most noteworthy in this DCF analysis for GCAP, they are:
GAIN Capital Holdings Inc's weighted average cost of capital (WACC) is 12%; for context, that number is higher than 87.05% of tickers in our DCF set.
GAIN Capital Holdings Inc's interest coverage rate -- a measure of gross earnings relative to interest payments -- comes in at -4.44. This coverage rate is greater than that of merely 7.59% of stocks we're observing for the purpose of forecasting via discounted cash flows.
The company's cost of debt, derived from its interest coverage, tax rate, and market capitalization, is greater than 87.95% of stocks in its sector (Financial Services).
Terminal Growth Rate in Free Cash Flow
Return Relative to Current Share Price
WRLD, ADS, CNFR, RGA, and FAF can be thought of as valuation peers to GCAP, in the sense that they are in the Financial Services sector and have a similar price forecast based on DCF valuation.