Discounted Cash Flow (DCF) Analysis Unlevered

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

$21.5

-0.20 (-0.92%)
All numbers are in Millions, Currency in USD
Stock DCF: 0.68 | 21.5 | overvalue

Operating Data

Year
A/P
2017
Actual
2018
Actual
2019
Actual
2020
Actual
2021
Actual
2022
Projected
2023
Projected
2024
Projected
2025
Projected
2026
Projected
Revenue 301.75314.08358.78322.10380.20405.04431.50459.70489.73521.73
Revenue (%)
EBITDA 19.67-3.1126.4829.4830.1124.2925.8827.5729.3731.29
EBITDA (%)
EBIT 13.15-8.9119.2322.2122.5515.9717.0118.1219.3020.57
EBIT (%)
Depreciation 6.525.807.257.277.568.328.879.4510.0610.72
Depreciation (%)

Balance Sheet Data

Year
A/P
2017
Actual
2018
Actual
2019
Actual
2020
Actual
2021
Actual
2022
Projected
2023
Projected
2024
Projected
2025
Projected
2026
Projected
Total Cash 10.7715.5423.3714.8020.9120.3521.6823.1024.6126.22
Total Cash (%)
Account Receivables 62.0470.2065.8553.8073.0278.7283.8689.3495.18101.39
Account Receivables (%)
Inventories 38.3448.6450.9349.2162.4760.0263.9468.1272.5777.31
Inventories (%)
Accounts Payable 45.6554.3356.2246.1875.7666.7271.0775.7280.6685.93
Accounts Payable (%)
Capital Expenditure -2.45-2.35-4.01-4.93-6.07-4.70-5.01-5.34-5.69-6.06
Capital Expenditure (%)

Weighted Average Cost Of Capital

Share price $ 21.5
Beta 0.675
Diluted Shares Outstanding 107.49
Cost of Debt
Tax Rate 28.58
After-tax Cost of Debt 3.23%
Risk-Free Rate
Market Risk Premium
Cost of Equity 6.877
Total Debt 28.76
Total Equity 2,310.95
Total Capital 2,339.70
Debt Weighting 1.23
Equity Weighting 98.77
Wacc

Build Up Free Cash

Year
A/P
2017
Actual
2018
Actual
2019
Actual
2020
Actual
2021
Actual
2022
Projected
2023
Projected
2024
Projected
2025
Projected
2026
Projected
Revenue 301.75314.08358.78322.10380.20405.04431.50459.70489.73521.73
EBITDA 19.67-3.1126.4829.4830.1124.2925.8827.5729.3731.29
EBIT 13.15-8.9119.2322.2122.5515.9717.0118.1219.3020.57
Tax Rate 48.05%212.30%39.51%32.93%28.58%72.27%72.27%72.27%72.27%72.27%
EBIAT 6.831011.6314.9016.114.434.725.025.355.70
Depreciation 6.525.807.257.277.568.328.879.4510.0610.72
Accounts Receivable --8.164.3512.05-19.23-5.69-5.14-5.48-5.84-6.22
Inventories --10.30-2.291.72-13.262.45-3.92-4.18-4.45-4.74
Accounts Payable -8.681.89-10.0429.58-9.044.364.644.955.27
Capital Expenditure -2.45-2.35-4-4.93-6.07-4.70-5.01-5.34-5.69-6.06
UFCF 10.913.6718.8220.9614.69-4.243.874.124.394.68
WACC
PV UFCF -3.973.393.383.373.36
SUM PV UFCF 9.53

Terminal Value

Growth in perpetuity method:
Long-term growth rate
WACC (%) 6.83
Free cash flow (t + 1) 4.77
Terminal Value 98.77
Present Value of Terminal Value 70.98

Intrinsic Value

Enterprise Value 80.51
Net Debt 7.85
Equity Value 72.66
Shares Outstanding 107.49
Equity Value Per Share 0.68