Thought this was a great writeup - thanks for sharing. The one thing that I had a question on is the share count - I think the company recently disclosed that the fully diluted share count is 2.173 billion. On your $41.7B equity value, that would imply a $19 stock.
Hi Chris! Thanks for your observation, I'll definitely revise that. I believe the appropriate share number to use in the model is the # of fully diluted shares less the number of options and RSUs that haven't vested. This is because the model assumes stock-based compensation is actually a cash expense, instead of removing it from the FCFF calculation and then trying to determine the effect of dilution in the future.
Thought this was a great writeup - thanks for sharing. The one thing that I had a question on is the share count - I think the company recently disclosed that the fully diluted share count is 2.173 billion. On your $41.7B equity value, that would imply a $19 stock.
Hi Chris! Thanks for your observation, I'll definitely revise that. I believe the appropriate share number to use in the model is the # of fully diluted shares less the number of options and RSUs that haven't vested. This is because the model assumes stock-based compensation is actually a cash expense, instead of removing it from the FCFF calculation and then trying to determine the effect of dilution in the future.