Perspecta Inc. provides enterprise information technology (IT) services to government customers in the United States federal, state, and local markets. It offers cloud, platform, and IT Outsourcing services; enterprise and cloud applications services in the areas of application modernization and transformation, application development, testing and digital assurance, and application management; and enterprise security solutions, including building security infrastructures into the fabric of U.S. government agencies' digital enterprises. The company also provides services for converged mobility and workplace management, such as mobile enterprise services, virtual desktop and application services, and workplace device services; and a portfolio of analytics services comprising analytics platforms, information governance, artificial intelligence, and advisory services. Perspecta Inc. is based in Chantilly, Virginia.
PRSP Price Forecast Based on DCF Valuation
DCF Fair Value Target:
The table below illustrates the output of a discounted cash flow forecast using a variety of scenarios for Perspecta Inc. To summarize, we found that Perspecta Inc ranked in the 99th percentile in terms of potential gain offered. Our DCF model suggests the stock is undervalued by 30014.5%; returns of such proportions should be viewed with some skepticism, though. The most interesting components of our discounted cash flow analysis for Perspecta Inc ended up being:
The stock's equity weight, or the proportion of capital from equity relative to debt, is 57. Notably, its equity weight is greater than just 10.32% of US equities in the Technology sector yielding a positive free cash flow.
Its compound free cash flow growth rate, as measured over the past 2.19 years, is 2.24% -- higher than 96.31% of stocks in our DCF forecasting set.
Perspecta Inc's interest coverage rate -- a measure of gross earnings relative to interest payments -- comes in at -4.33. This coverage rate is greater than that of just 12.53% of stocks we're observing for the purpose of forecasting via discounted cash flows.
Terminal Growth Rate in Free Cash Flow
Return Relative to Current Share Price
MOMO, SEDG, LITE, OKTA, and DCMYY can be thought of as valuation peers to PRSP, in the sense that they are in the Technology sector and have a similar price forecast based on DCF valuation.
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Perspecta Inc. (NYSE: PRSP), a leading U.S. government services provider, announced today it will issue its first quarter and fiscal year 2021 earnings press release after close of market on Thursday, August 6, 2020. Members of Perspecta's executive team will discuss the results in a conference call beginning at 5:00 p.m. EDT.