Discounted Cash Flow (DCF) Analysis Levered

Hammond Power Solutions Inc. (HPS-A.TO)

$79.83

+0.60 (+0.76%)

All numbers are in Millions, Currency in USD

Stock DCF: 63.26 | 79.83 | overvalue

Free Cash Flow

Year A/P	2018 Actual	2019 Actual	2020 Actual	2021 Actual	2022 Actual	2023 Projected	2024 Projected	2025 Projected	2026 Projected	2027 Projected
Revenue	314.08	358.78	322.10	380.20	558.46	654.71	767.53	899.80	1,054.87	1,236.65
Revenue (%)
Operating Cash Flow	6.47	17.81	19.68	20.45	37.01	32.92	38.59	45.25	53.04	62.18
Operating Cash Flow (%)
Capital Expenditure	-2.35	-4.01	-4.93	-6.07	-9.33	-8.73	-10.23	-11.99	-14.06	-16.48
Capital Expenditure (%)
Free Cash Flow	4.12	13.80	14.75	14.38	27.68	24.19	28.36	33.25	38.98	45.70

Weighted Average Cost Of Capital

Share price	$ 79.83
Beta	0.669
Diluted Shares Outstanding	11.88
Cost of Debt
Tax Rate	21.59
After-tax Cost of Debt	7.11%
Risk-Free Rate
Market Risk Premium
Cost of Equity	7.398
Total Debt	17.59
Total Equity	948.09
Total Capital	965.68
Debt Weighting	1.82
Equity Weighting	98.18
Wacc

Build Up Free Cash Flow

Year A/P	2018 Actual	2019 Actual	2020 Actual	2021 Actual	2022 Actual	2023 Projected	2024 Projected	2025 Projected	2026 Projected	2027 Projected
Revenue	314.08	358.78	322.10	380.20	558.46	654.71	767.53	899.80	1,054.87	1,236.65
Operating Cash Flow	6.47	17.81	19.68	20.45	37.01	32.92	38.59	45.25	53.04	62.18
Capital Expenditure	-2.35	-4.01	-4.93	-6.07	-9.33	-8.73	-10.23	-11.99	-14.06	-16.48
Free Cash Flow	4.12	13.80	14.75	14.38	27.68	24.19	28.36	33.25	38.98	45.70
WACC
PV LFCF						22.53	24.59	26.85	29.31	32
SUM PV LFCF										135.28

Terminal Value

Growth in perpetuity method:
Long-term growth rate
WACC (%)	7.39
Free cash flow (t + 1)	46.61
Terminal Value	864.81
Present Value of Terminal Value	605.49

Intrinsic Value

Enterprise Value	740.76
Net Debt	-10.53
Equity Value	751.30
Shares Outstanding	11.88
Equity Value Per Share	63.26