Cash flow is an important metric in any company’s success. It measures its ability to generate cash, the most important concept in business. Free Cash Flow (FCF), as defined by operating cash flow less capital expenditure, is a metric focusing on the cash flows required to sustain the operations of a business. The companies on our list are trading at 100x FCF, implying that it would take 100 years to earn its current valuation in cash flows, and suggesting an overvaluation in the 10-20x range.
Amazon.com Inc. (NASDAQ: AMZN) – $488.10
Department Stores
Amazon.com, Inc. (Amazon.com) is an e-commerce company that sells a range of products and services through its websites. The Company’s products are offered through consumer-facing websites, which include merchandise and content that it purchases for resale from vendors and those offered by third-party sellers. It designs its websites to enable products to be sold by the Company and by third parties across various product categories. It also manufactures and sells electronic devices, including Kindle e-readers, Fire tablets, Fire TVs, Echo and Fire phones.
- Market Cap: $227,298,875,112
- P/FCF: 116.6x
- Total Revenue (LTM): $91,964,000,000
- Free Cash Flow (LFY): $1,949,000,000
Fiat Chrysler Automobiles NV (NYSE: FCAU) – $15.47
Auto & Truck Manufacturers
Fiat Chrysler Automobiles N.V. is an automotive company engaged in designing, engineering, manufacturing, distributing and selling vehicles, components and production systems. The Company operates in seven segments: NAFTA; LATAM; APAC; EMEA; Ferrari; Maserati, and Components. The Company has operations in approximately 40 countries and sells its vehicles, directly or through distributors and dealers, in over 150 countries. It designs, engineers, manufactures, distributes and sells vehicles under the Abarth, Alfa Romeo, Chrysler, Dodge, Fiat, Fiat Professional, Jeep, Lancia and Ram brands and the street and racing technology (SRT) vehicle designation.
- Market Cap: $19,877,704,742
- P/FCF: 342.3x
- Total Revenue (LTM): $122,774,495,614
- Free Cash Flow (LFY): $58,065,687
Yelp Inc. (NYSE: YELP) – $35.57
Advertising & Marketing
Yelp Inc. (Yelp) connects people with local businesses by bringing ‘word of mouth’ online and providing a platform for businesses and consumers to engage and transact. The Company provides local business review sites as well as a platform for consumers to share their everyday local business experiences, through reviews, tips, photos and videos, and engage directly with businesses, through reviews and its Message the Business feature. The Company has a range of communities of contributors across the world that provide the content on its platform. These contributors provide firsthand information about local businesses in the form of reviews and ratings, tips, photos and videos.
- Market Cap: $2,583,841,202
- P/FCF: 163.5x
- Total Revenue (LTM): $419,637,000
- Free Cash Flow (LFY): $15,805,000
Under Armour Inc. (NYSE: UA) – $88.95
Apparel & Accessories
Under Armour, Inc. is engaged in the development, marketing and distribution of branded performance apparel, footwear and accessories for men, women and youth. The Company’s moisture-wicking fabrications are engineered in a range of designs and styles for wear in nearly every climate to provide an alternative to traditional products. The Company’s operating segments include North America, consisting of the United States and Canada; Europe, the Middle East and Africa (EMEA); Asia-Pacific; Latin America, and MapMyFitness.
- Market Cap: $19,183,092,738
- P/FCF: 244.4x
- Total Revenue (LTM): $3,247,704,000
- Free Cash Flow (LFY): $78,505,000
GoPro Inc. (NASDAQ: GPRO) – $62.04
Household Electronics
GoPro, Inc. produces mountable and wearable cameras and accessories, which the Company refers to as capture devices. Additionally, it develops and provides desktop editing software and mobile applications for free to consumers. The Company offers HERO line of capture devices, which include HERO2, HERO3 camera, the HERO3+ camera and the HERO4 and HERO. The Company also provides a selection of mounts designed to enable consumers to capture content while engaged in a range of activities. This includes equipment-based mounts, such as the helmet, handlebar, roll bar, as well as grip and tripod mounts.
- Market Cap: $8,181,016,352
- P/FCF: 117.8x
- Total Revenue (LTM): $1,521,598,000
- Free Cash Flow (LFY): $69,424,000
