Friends,
What kind of financial models do "Technology industry" Equity Research Associates build ?
Viks
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Fully integrated 3 statements, primarily to drive EPS forecasts... some do DCFs but rarely... the key objective of most sellside ER ppl is spitting out a 1-3yr forward EPS figure and multiply it by some appropriate multiple (depending on a few factors) to arrive at a target price. I've seen some elaborate revenue builds with target market growth rates, segmentation, pricing trends, share..etc.. which are informative.
i just noticed you addressed the thread as "Friends, ." i'm very curious, why did you do that?
Dude Vikram, u there. Vikram?
Vikaram is probably an international student or at least raised overseas. I have seen many people in India and Singapore do that. Nothing wrong with it....
Nothing wrong with it at all. I think it's a great habit
Yes. I just wanted to be friendly ... so wrote "Hi Friends,".
:-)
Thank you for your help - DurbanDiMangus.
Thank you Unknown4ever.
wtf durban why don't you want to be his friend??
Following is the job Desc of a "equity research" position.
Construction and maintenance of financial models including: earnings, valuations and industry models for the firm’s sales force and institutional clients.
What kind of industry models do Equity Research folks build ?
Also what other models Equity Research folks build ?
Basically, you want to periodically publish theses for a 12m horizon of where you think a stock will be given today's information and mangement guidance. So that implies applying proper multiples, forecasting revenues (look at end market, segments, etc), flowing it through linked statements and arriving at EPS estimates. Complexity depends on the analyst. Rule of thumb is: can my model rigorously (or at least to a large extent) quantify any news about that company? If so, then the model is robust. If not, then you are just guessing numbers.
In the rare case of an M&A within your coverage space, then you build merger models. You might also look at LBOs (again, very rare) if the company is a well known candidate.
Hi, digital entertainment i.e. online games is one area of coverage
This valuation model was created by a Technology Analyst at a major global investment bank. The model was used for the purpose of valuing a listed global online game developer and publishing company. The model contains more than 140 sheets and is created in excel. The contents of the model are as follows:
Projections Key Financial Ratios: EPS – Normalized, P/E – Normalized, Normalized ROE
Discounted Cash Flow Analysis Share Price Information, PO Comparison, Enterprise Value Information, Capital Structure, WACC, Terminal Value, Implied Share Price Analysis, Free Cash Flow
Financial Information Income Statement, Balance Sheet, Cash Flow Statement, Operating Expense Schedule, Balance Sheet – Asset Schedule, PP&E / Capex / Depr Schedule, Intangible Asset / Amort Schedule, Balance Sheet – Liability Schedule, Financing Assumptions, Interest Exp / Inc Schedule, SHE Assumptions
Global Handset Forecasts Installed Base Forecast for 88 Countries: 2002 to 2017, Smartphone User Penetration Forecast by 88 Countries: 2007 to 2017, By Type: Phablet, Superphone, Smartphone, Feature Phone & Basic Phone
Broker vs Bloomberg consensus Game Co. – Actual vs Bloomberg consensus, Actual vs Broker Estimates Discounted Cash Flow Analysis ($ in 000’s, except per share data) PV of Unlevered Free Cash Flow, Terminal Value, WACC, Implied Share Price Analysis
Revenues Revenue by Device Type, Revenue Mix by Device Type, Domestic Moblie Subs (000s), Smart phone Game Revenue, Feature phone Game Revenue, SA Global Handset Sales (mn), FX Assumptions, SG Revenue Overseas, FG Revenue Overseas, Domestic / Overseas Revenue, In-House vs Publishing Revenue, Number of Titles Launched, Revenue by Purchase Type, Overseas Revenue Mix, Revenue by Game Genre, Number of Platform Games Launched, Number of Developers, Revenue by Region, Revenue Type, Revenue by Build-Up by DAU/MAU, Number of Game Downloads 000s
Charts Global Handset Sales by Type, Revenue by Game Genre, Revenue by Device Type, Revenue Mix by Device Type, Marketing and Commissions, DAU and MAU trends in mn, Overseas revenue breakdown, In-House vs Publishing Revenue
Appendices Capital iQ excel plug-in data template
thank you, where can i find this??
Financial Models built by Sell Side Equity Research Associates: what types are built? (Originally Posted: 06/23/2011)
Friends,
What kind of financial models do "Technology industry" Equity Research Associates build ?
Viks
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