* Note: Prices are in Million (M) USD.
Description:
Synchrony Financial is a consumer financial services company headquartered in Stamford, Connecticut, United States. The company offers consumer financing products, including credit, promotional financing and loyalty programs, installment lending to industries, and FDIC-insured consumer savings products through Synchrony Bank, its wholly owned online bank subsidiary.
These criteria used Company's Cash, EBITDA and Debt balance to determines its fair value:
Cash : $19,457 M
Debt : $16,009 M
EBITDA : $8,869 M
Since Cash is greater than Total Debt, 5 points assigned.
This criteria used industry in which company operates:
Sector: Financial services
Industry: Credit services
Based on industry, 3 points assigned.
This criteria used Company's Price To Earning (P/E) Ratio to determines its fair value:
Forward PE Ratio: 8.31
Since Forward PE Ratio is less than 15, 5 points assigned.
This criteria used Company's ability to convert Sales into free cash flow to determine fair value:
Using last 14 overlapping fiscal years (max 20).Average Free Cash Flow: $6,443 M
Average Revenue: $11,995 M
Revenue Converted To Free Cash Flow (%): 53.7%
Since Free Cash Flow (FCF) to Revenue percentage is greater than 25, 5 points assigned.
This criteria used company's growth potential to calculate its fair value:
Latest Revenue (2024-12-31): $24,166 M
Revenue 4 Years Ago (2020-12-31): $11,162 M
Last 5 Years Average Revenue Growth: 23%
Since Revenue Growth is greater than 20, 5 points assigned.
This criteria used Company's ability to buy back its own share:
Latest Share Count (2024-12-31): $401 M
Share Count 5 Years Ago (2020-12-31): $584 M
Company is buying back its own shares, 3 points assigned.
This criteria used Company's dividend payout ratio to determine its fair value:
Next Year Earnings Per Share (EPS): $9.39
Trailing 12-Month Earnings Per Share (EPS): $9.04
Average Earnings Per Share (EPS): $9.22
Dividend Per Share (DPS): $1
Payout Ratio: 11%
Dividend Yield: 1%
Since company Payout Ratio is less than 50, 2 points assigned.
Since Dividend Yield is greater than 1, 1 point assigned.
This criteria used Company's Return On Equity (ROE%) to determine its fair value:
Using last 13 valid ROE years (max 20).Average ROE: 22.5%
Since Average ROE is greater than 20, 5 points assigned.
This criteria used Company's current price to its 52 week low price to determines its fair value:
Current Price: $77
52-Week Low: $40
Threshold Price (15% Above 52-Week Low): $46
Since Current price is not within 15% threshold, 0 point assigned.
This criteria used Company's Market Cap to determines its fair value:
Market Capitalization: $28,492 M
Since Market Cap is between 10B - 100B, 2 points assigned.
% Exposure to Total Portfolio
Based on the market cap, we recommend do not exceed 3% exposure of Total Portfolio.
Value-Trade has assigned 36 points to above Synchrony Financial (SYF) stock.
Heads up: One or more P/E inputs look exaggerated and may skew the blend.
• RCFC Based PE
50.00 (>2× median)
Further research is recommended; please use your own due diligence.In such cases, multiplying earnings by the long-run average P/E typically gives a closer, more reliable fair value.
Rule of thumb: Last 11 Years Avg P/E (10.26)
× EPS ($9.22) = $94.55.
Last 11 Years Avg PE 10.26, Fair Value PE 15, Industry Based PE 20, Growth Based PE 23, RCFC Based PE 50, ROE Based PE 28.02, Risk-Free Anchored PE (25% MoS) 17.08. Based on these 7 values, average assigned is 23.34. Value-Trades has assined P/E value 23.34. Since an average (Current Year EPS + Next Year EPS) earning per share is $9.215.
The fair value of Synchrony Financial (SYF) stock should be (23.34 x $9.215) = $215.06.
