Discounted Cash Flow (DCF) Analysis Levered

Héroux-Devtek Inc. (HRX.TO)

$15.25

-0.42 (-2.68%)

All numbers are in Millions, Currency in USD

Stock DCF: 9.59 | 15.25 | overvalue

Free Cash Flow

Year A/P	2019 Actual	2020 Actual	2021 Actual	2022 Actual	2023 Actual	2024 Projected	2025 Projected	2026 Projected	2027 Projected	2028 Projected
Revenue	483.88	613	570.69	536.09	543.62	564.18	585.51	607.65	630.63	654.47
Revenue (%)
Operating Cash Flow	69.97	52.57	89.19	63.17	30.06	63.16	65.55	68.03	70.60	73.27
Operating Cash Flow (%)
Capital Expenditure	-12.86	-22.24	-21.90	-20.15	-31.78	-22.26	-23.10	-23.98	-24.88	-25.82
Capital Expenditure (%)
Free Cash Flow	57.11	30.33	67.29	43.01	-1.72	40.90	42.45	44.05	45.72	47.45

Weighted Average Cost Of Capital

Share price	$ 15.25
Beta	1.710
Diluted Shares Outstanding	34.48
Cost of Debt
Tax Rate	25.76
After-tax Cost of Debt	4.56%
Risk-Free Rate
Market Risk Premium
Cost of Equity	12.873
Total Debt	177.91
Total Equity	525.90
Total Capital	703.80
Debt Weighting	25.28
Equity Weighting	74.72
Wacc

Build Up Free Cash Flow

Year A/P	2019 Actual	2020 Actual	2021 Actual	2022 Actual	2023 Actual	2024 Projected	2025 Projected	2026 Projected	2027 Projected	2028 Projected
Revenue	483.88	613	570.69	536.09	543.62	564.18	585.51	607.65	630.63	654.47
Operating Cash Flow	69.97	52.57	89.19	63.17	30.06	63.16	65.55	68.03	70.60	73.27
Capital Expenditure	-12.86	-22.24	-21.90	-20.15	-31.78	-22.26	-23.10	-23.98	-24.88	-25.82
Free Cash Flow	57.11	30.33	67.29	43.01	-1.72	40.90	42.45	44.05	45.72	47.45
WACC
PV LFCF						36.92	34.59	32.41	30.37	28.45
SUM PV LFCF										162.75

Terminal Value

Growth in perpetuity method:
Long-term growth rate
WACC (%)	10.77
Free cash flow (t + 1)	48.40
Terminal Value	551.84
Present Value of Terminal Value	330.90

Intrinsic Value

Enterprise Value	493.65
Net Debt	162.89
Equity Value	330.76
Shares Outstanding	34.48
Equity Value Per Share	9.59