Discounted Cash Flow (DCF) Analysis Levered

Héroux-Devtek Inc. (HRX.TO)

$13.5

-0.73 (-5.13%)

All numbers are in Millions, Currency in USD

Stock DCF: 24.91 | 13.5 | undervalue

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	386.56	483.88	613	570.68	536.09	588.21	645.41	708.16	777.02	852.57
Revenue (%)
Operating Cash Flow	56.12	69.97	52.57	89.19	63.17	76.43	83.86	92.01	100.96	110.78
Operating Cash Flow (%)
Capital Expenditure	-9.93	-12.86	-22.24	-21.90	-20.15	-19.35	-21.24	-23.30	-25.57	-28.05
Capital Expenditure (%)
Free Cash Flow	46.19	57.11	30.33	67.29	43.01	57.07	62.62	68.71	75.39	82.72

Weighted Average Cost Of Capital

Share price	$ 13.5
Beta	1.778
Diluted Shares Outstanding	36.02
Cost of Debt
Tax Rate	19.67
After-tax Cost of Debt	2.67%
Risk-Free Rate
Market Risk Premium
Cost of Equity	12.092
Total Debt	236.53
Total Equity	486.31
Total Capital	722.84
Debt Weighting	32.72
Equity Weighting	67.28
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	386.56	483.88	613	570.68	536.09	588.21	645.41	708.16	777.02	852.57
Operating Cash Flow	56.12	69.97	52.57	89.19	63.17	76.43	83.86	92.01	100.96	110.78
Capital Expenditure	-9.93	-12.86	-22.24	-21.90	-20.15	-19.35	-21.24	-23.30	-25.57	-28.05
Free Cash Flow	46.19	57.11	30.33	67.29	43.01	57.07	62.62	68.71	75.39	82.72
WACC
PV LFCF						40.42	40.68	40.95	41.22	41.49
SUM PV LFCF										265.23

Terminal Value

Growth in perpetuity method:
Long-term growth rate
WACC (%)	9.01
Free cash flow (t + 1)	84.38
Terminal Value	1,203.67
Present Value of Terminal Value	781.95

Intrinsic Value

Enterprise Value	1,047.17
Net Debt	149.83
Equity Value	897.34
Shares Outstanding	36.02
Equity Value Per Share	24.91