Intrinsic value of Astec Industries - ASTE

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$55.58

  Intrinsic Value

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  Value-price divergence*

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$55.58

 
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*Intrinsic value change (in %) minus stock price change (in %) in the past 12 months.

We calculate the intrinsic value of ASTE stock by summing up the current values of future distributable cash flows generated by the company and dividing the sum by the number of outstanding shares. As such, the intrinsic value calculation depends entirely on projections. The more accurate your projections of the company's performance are - the more reliable is the intrinsic value calculation result. Please make sure to check the stock valuation input data below and adjust it if necessary. The quality of the output (intrinsic valuation result) is only as good as the quality of the input. See also DISCLAIMERS.

STOCK VALUATION INPUT DATA

Revenue (in 2016), $M
Initial revenue growth rate, %
Terminal revenue growth rate, %
Revenue decline factor
Initial discount rate, %
Discount rate multiplier
Variable cost ratio, %
Fixed operating expenses, $M
Interest rate on debt, %
Effective corporate tax rate, %
Production assets / Revenue, %
Life of production assets, yrs
Working capital / Revenue, %
Revenue / Adjusted assets
Adjusted equity ratio
Cash flow adjustment, % of Revenue
Book value of equity, $M
Shares outstanding, mln
Market capitalization, $bln 1.2

 

FINANCIAL STATEMENTS FORECAST and PRESENT VALUE CALCULATION

Fiscal year
2016(a)
   2017
   2018
   2019
   2020
   2021
   2022
   2023
   2024
   2025
   2026
   2027
   2028
   2029
   2030
   2031
   2032
   2033
   2034
   2035
   2036
   2037
   2038
   2039
   2040
   2041
   2042
   2043
   2044
   2045
   2046

INCOME STATEMENT

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue growth rate, %
  16.68
  52.10
  47.39
  43.15
  39.34
  35.90
  32.81
  30.03
  27.53
  25.28
  23.25
  21.42
  19.78
  18.30
  16.97
  15.77
  14.70
  13.73
  12.85
  12.07
  11.36
  10.73
  10.15
  9.64
  9.17
  8.76
  8.38
  8.04
  7.74
  7.46
  7.22
Revenue, $m
  1,147
  1,745
  2,571
  3,681
  5,129
  6,970
  9,257
  12,037
  15,351
  19,231
  23,702
  28,779
  34,472
  40,781
  47,702
  55,227
  63,344
  72,040
  81,301
  91,113
  101,466
  112,350
  123,757
  135,685
  148,133
  161,106
  174,608
  188,652
  203,252
  218,424
  234,191
Variable operating expenses, $m
 
  1,350
  1,990
  2,849
  3,970
  5,395
  7,165
  9,317
  11,882
  14,885
  18,345
  22,275
  26,681
  31,564
  36,922
  42,746
  49,028
  55,759
  62,927
  70,522
  78,535
  86,959
  95,788
  105,020
  114,655
  124,696
  135,147
  146,017
  157,317
  169,061
  181,264
Fixed operating expenses, $m
 
  180
  185
  190
  194
  199
  204
  209
  214
  220
  225
  231
  237
  243
  249
  255
  261
  268
  274
  281
  288
  296
  303
  311
  318
  326
  334
  343
  351
  360
  369
Total operating expenses, $m
  1,060
  1,530
  2,175
  3,039
  4,164
  5,594
  7,369
  9,526
  12,096
  15,105
  18,570
  22,506
  26,918
  31,807
  37,171
  43,001
  49,289
  56,027
  63,201
  70,803
  78,823
  87,255
  96,091
  105,331
  114,973
  125,022
  135,481
  146,360
  157,668
  169,421
  181,633
Operating income, $m
  87
  214
  396
  642
  965
  1,376
  1,888
  2,511
  3,255
  4,126
  5,131
  6,273
  7,554
  8,974
  10,532
  12,226
  14,055
  16,013
  18,099
  20,310
  22,643
  25,095
  27,666
  30,354
  33,160
  36,084
  39,127
  42,293
  45,584
  49,004
  52,558
EBITDA, $m
  112
  242
  438
  702
  1,048
  1,489
  2,038
  2,706
  3,504
  4,438
  5,515
  6,739
  8,112
  9,635
  11,305
  13,121
  15,081
  17,180
  19,417
  21,786
  24,287
  26,915
  29,671
  32,552
  35,560
  38,693
  41,956
  45,349
  48,876
  52,542
  56,352
Interest expense (income), $m
  1
  0
  41
  97
  172
  271
  396
  551
  740
  965
  1,229
  1,533
  1,878
  2,264
  2,693
  3,163
  3,675
  4,226
  4,817
  5,446
  6,113
  6,817
  7,556
  8,331
  9,142
  9,988
  10,869
  11,787
  12,741
  13,733
  14,764
Earnings before tax, $m
  87
  214
  356
  546
  793
  1,106
  1,492
  1,960
  2,515
  3,161
  3,903
  4,741
  5,676
  6,710
  7,839
  9,063
  10,380
  11,787
  13,282
  14,864
  16,530
  18,279
  20,110
  22,023
  24,018
  26,096
  28,258
  30,506
  32,843
  35,271
  37,794
Tax expense, $m
  32
  58
  96
  147
  214
  299
  403
  529
  679
  854
  1,054
  1,280
  1,533
  1,812
  2,117
  2,447
  2,803
  3,182
  3,586
  4,013
  4,463
  4,935
  5,430
  5,946
  6,485
  7,046
  7,630
  8,237
  8,868
  9,523
  10,204
Net income, $m
  55
  156
  260
  398
  579
  807
  1,089
  1,431
  1,836
  2,308
  2,849
  3,461
  4,144
  4,898
  5,722
  6,616
  7,577
  8,605
  9,696
  10,851
  12,067
  13,344
  14,680
  16,077
  17,533
  19,050
  20,628
  22,269
  23,975
  25,748
  27,590

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  83
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total assets, $m
  844
  1,158
  1,706
  2,443
  3,403
  4,625
  6,143
  7,988
  10,186
  12,761
  15,728
  19,097
  22,874
  27,061
  31,654
  36,647
  42,033
  47,804
  53,949
  60,460
  67,330
  74,552
  82,121
  90,037
  98,297
  106,905
  115,865
  125,184
  134,872
  144,940
  155,402
Adjusted assets (=assets-cash), $m
  761
  1,158
  1,706
  2,443
  3,403
  4,625
  6,143
  7,988
  10,186
  12,761
  15,728
  19,097
  22,874
  27,061
  31,654
  36,647
  42,033
  47,804
  53,949
  60,460
  67,330
  74,552
  82,121
  90,037
  98,297
  106,905
  115,865
  125,184
  134,872
  144,940
  155,402
Revenue / Adjusted assets
  1.507
  1.507
  1.507
  1.507
  1.507
  1.507
  1.507
  1.507
  1.507
  1.507
  1.507
  1.507
  1.507
  1.507
  1.507
  1.507
  1.507
  1.507
  1.507
  1.507
  1.507
  1.507
  1.507
  1.507
  1.507
  1.507
  1.507
  1.507
  1.507
  1.507
  1.507
Average production assets, $m
  197
  141
  208
  298
  415
  565
  750
  975
  1,243
  1,558
  1,920
  2,331
  2,792
  3,303
  3,864
  4,473
  5,131
  5,835
  6,585
  7,380
  8,219
  9,100
  10,024
  10,990
  11,999
  13,050
  14,143
  15,281
  16,463
  17,692
  18,970
Working capital, $m
  408
  494
  728
  1,042
  1,451
  1,973
  2,620
  3,407
  4,344
  5,442
  6,708
  8,144
  9,755
  11,541
  13,500
  15,629
  17,926
  20,387
  23,008
  25,785
  28,715
  31,795
  35,023
  38,399
  41,922
  45,593
  49,414
  53,389
  57,520
  61,814
  66,276
Total debt, $m
  11
  101
  242
  430
  676
  989
  1,378
  1,850
  2,413
  3,072
  3,831
  4,694
  5,661
  6,733
  7,908
  9,187
  10,566
  12,043
  13,616
  15,283
  17,041
  18,890
  20,828
  22,854
  24,969
  27,173
  29,466
  31,852
  34,332
  36,910
  39,588
Total liabilities, $m
  196
  296
  437
  625
  871
  1,184
  1,573
  2,045
  2,608
  3,267
  4,026
  4,889
  5,856
  6,928
  8,103
  9,382
  10,761
  12,238
  13,811
  15,478
  17,236
  19,085
  21,023
  23,049
  25,164
  27,368
  29,661
  32,047
  34,527
  37,105
  39,783
Total equity, $m
  648
  861
  1,269
  1,817
  2,532
  3,441
  4,570
  5,943
  7,579
  9,494
  11,701
  14,208
  17,019
  20,133
  23,550
  27,265
  31,273
  35,566
  40,138
  44,982
  50,093
  55,467
  61,098
  66,987
  73,133
  79,537
  86,203
  93,137
  100,345
  107,835
  115,619
Total liabilities and equity, $m
  844
  1,157
  1,706
  2,442
  3,403
  4,625
  6,143
  7,988
  10,187
  12,761
  15,727
  19,097
  22,875
  27,061
  31,653
  36,647
  42,034
  47,804
  53,949
  60,460
  67,329
  74,552
  82,121
  90,036
  98,297
  106,905
  115,864
  125,184
  134,872
  144,940
  155,402
Debt-to-equity ratio
  0.017
  0.120
  0.190
  0.240
  0.270
  0.290
  0.300
  0.310
  0.320
  0.320
  0.330
  0.330
  0.330
  0.330
  0.340
  0.340
  0.340
  0.340
  0.340
  0.340
  0.340
  0.340
  0.340
  0.340
  0.340
  0.340
  0.340
  0.340
  0.340
  0.340
  0.340
Adjusted equity ratio
  0.749
  0.744
  0.744
  0.744
  0.744
  0.744
  0.744
  0.744
  0.744
  0.744
  0.744
  0.744
  0.744
  0.744
  0.744
  0.744
  0.744
  0.744
  0.744
  0.744
  0.744
  0.744
  0.744
  0.744
  0.744
  0.744
  0.744
  0.744
  0.744
  0.744
  0.744

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  55
  156
  260
  398
  579
  807
  1,089
  1,431
  1,836
  2,308
  2,849
  3,461
  4,144
  4,898
  5,722
  6,616
  7,577
  8,605
  9,696
  10,851
  12,067
  13,344
  14,680
  16,077
  17,533
  19,050
  20,628
  22,269
  23,975
  25,748
  27,590
Depreciation, amort., depletion, $m
  25
  28
  42
  60
  83
  113
  150
  195
  249
  312
  384
  466
  558
  661
  773
  895
  1,026
  1,167
  1,317
  1,476
  1,644
  1,820
  2,005
  2,198
  2,400
  2,610
  2,829
  3,056
  3,293
  3,538
  3,794
Funds from operations, $m
  172
  184
  301
  458
  662
  920
  1,239
  1,626
  2,085
  2,619
  3,233
  3,927
  4,702
  5,559
  6,495
  7,511
  8,603
  9,772
  11,013
  12,327
  13,711
  15,164
  16,685
  18,275
  19,933
  21,660
  23,457
  25,326
  27,268
  29,286
  31,384
Change in working capital, $m
  37
  169
  234
  314
  410
  521
  647
  787
  938
  1,098
  1,265
  1,437
  1,611
  1,785
  1,959
  2,130
  2,297
  2,461
  2,621
  2,777
  2,930
  3,080
  3,228
  3,376
  3,523
  3,671
  3,821
  3,974
  4,132
  4,294
  4,462
Cash from operations, $m
  135
  -77
  67
  144
  252
  399
  592
  839
  1,147
  1,521
  1,968
  2,490
  3,091
  3,773
  4,536
  5,381
  6,306
  7,311
  8,392
  9,550
  10,781
  12,084
  13,457
  14,899
  16,410
  17,989
  19,636
  21,351
  23,136
  24,992
  26,922
Maintenance CAPEX, $m
  0
  -19
  -28
  -42
  -60
  -83
  -113
  -150
  -195
  -249
  -312
  -384
  -466
  -558
  -661
  -773
  -895
  -1,026
  -1,167
  -1,317
  -1,476
  -1,644
  -1,820
  -2,005
  -2,198
  -2,400
  -2,610
  -2,829
  -3,056
  -3,293
  -3,538
New CAPEX, $m
  -27
  -49
  -67
  -90
  -117
  -149
  -185
  -225
  -268
  -314
  -362
  -411
  -461
  -511
  -561
  -610
  -657
  -704
  -750
  -795
  -839
  -882
  -924
  -966
  -1,008
  -1,051
  -1,094
  -1,138
  -1,183
  -1,229
  -1,277
Cash from investing activities, $m
  -66
  -68
  -95
  -132
  -177
  -232
  -298
  -375
  -463
  -563
  -674
  -795
  -927
  -1,069
  -1,222
  -1,383
  -1,552
  -1,730
  -1,917
  -2,112
  -2,315
  -2,526
  -2,744
  -2,971
  -3,206
  -3,451
  -3,704
  -3,967
  -4,239
  -4,522
  -4,815
Free cash flow, $m
  69
  -145
  -28
  12
  75
  167
  294
  464
  683
  958
  1,294
  1,695
  2,164
  2,704
  3,315
  3,999
  4,754
  5,580
  6,475
  7,438
  8,466
  9,558
  10,713
  11,928
  13,204
  14,538
  15,932
  17,385
  18,897
  20,471
  22,106
Issuance/(repayment) of debt, $m
  0
  101
  140
  188
  246
  313
  389
  472
  563
  659
  759
  863
  967
  1,072
  1,176
  1,278
  1,379
  1,477
  1,573
  1,667
  1,759
  1,849
  1,938
  2,026
  2,115
  2,204
  2,294
  2,386
  2,480
  2,577
  2,678
Issuance/(repurchase) of shares, $m
  0
  255
  296
  347
  394
  430
  447
  436
  390
  298
  154
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash from financing (excl. dividends), $m  
  -2
  356
  436
  535
  640
  743
  836
  908
  953
  957
  913
  863
  967
  1,072
  1,176
  1,278
  1,379
  1,477
  1,573
  1,667
  1,759
  1,849
  1,938
  2,026
  2,115
  2,204
  2,294
  2,386
  2,480
  2,577
  2,678
Total cash flow (excl. dividends), $m
  66
  -43
  113
  201
  321
  479
  683
  936
  1,246
  1,617
  2,053
  2,557
  3,131
  3,775
  4,491
  5,277
  6,133
  7,057
  8,048
  9,105
  10,225
  11,407
  12,651
  13,954
  15,318
  16,742
  18,226
  19,771
  21,378
  23,048
  24,784
Retained Cash Flow (-), $m
  -40
  -295
  -408
  -548
  -715
  -909
  -1,129
  -1,372
  -1,636
  -1,916
  -2,207
  -2,507
  -2,810
  -3,115
  -3,417
  -3,715
  -4,007
  -4,293
  -4,572
  -4,844
  -5,111
  -5,373
  -5,632
  -5,889
  -6,146
  -6,404
  -6,666
  -6,933
  -7,208
  -7,491
  -7,784
Prev. year cash balance distribution, $m
 
  83
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash flow adjustment, $m
 
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash available for distribution, $m
 
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  50
  320
  661
  1,074
  1,562
  2,126
  2,764
  3,476
  4,260
  5,114
  6,034
  7,019
  8,066
  9,173
  10,338
  11,560
  12,837
  14,170
  15,557
  17,000
Discount rate, %
 
  4.30
  4.52
  4.74
  4.98
  5.23
  5.49
  5.76
  6.05
  6.35
  6.67
  7.00
  7.35
  7.72
  8.11
  8.51
  8.94
  9.39
  9.86
  10.35
  10.87
  11.41
  11.98
  12.58
  13.21
  13.87
  14.56
  15.29
  16.05
  16.86
  17.70
PV of cash for distribution, $m
 
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  24
  137
  251
  361
  459
  540
  601
  640
  656
  650
  624
  582
  529
  467
  402
  337
  276
  219
  170
  128
Current shareholders' claim on cash, %
  100
  80.9
  68.6
  60.0
  53.9
  49.5
  46.3
  44.1
  42.7
  41.8
  41.5
  41.5
  41.5
  41.5
  41.5
  41.5
  41.5
  41.5
  41.5
  41.5
  41.5
  41.5
  41.5
  41.5
  41.5
  41.5
  41.5
  41.5
  41.5
  41.5
  41.5

Astec Industries, Inc. designs, engineers, manufactures, and markets equipment and components primarily for the road building, aggregate processing, geothermal, water, oil and gas, and wood processing industries in the United States and internationally. Its Infrastructure Group segment offers asphalt and wood pellet plants, and related components; asphalt pavers, screeds, milling machines, material transfer vehicles, stabilizers, and related ancillary equipment; and commercial pavers. The company’s Aggregate and Mining Group segment provides aggregate processing and mining equipment for the production and classification of sand, gravel, crushed stone, and minerals used in road construction and other applications; mobile screening plants, portable and stationary structures, and vibrating screens; portable and stationary aggregate and ore processing equipment; rock breaking systems, processing equipment, and utility vehicles; and bulk material handling systems and minerals processing equipment. Its Energy Group segment offers thermal fluid heaters, process heaters, waste heat recovery equipment, liquid storage systems, and polymer and rubber blending systems under the HEATEC name; storage tanks, concrete plants, and rubberized asphalt and polymer blending systems; portable drilling rigs and related equipment for the water well, environmental, groundwater monitoring, construction, geothermal, mining, and shallow oil and gas exploration and production industries; high pressure diesel powered pump trailers used for fracking and cleaning oil and gas wells; and drilling rigs for the oil and gas industries, as well as tree pulpwood chippers, horizontal grinders, and blower trucks. The company sells its products through sales agents, manufacturer reps, distributors, and dealers. Astec Industries, Inc. was founded in 1972 and is based in Chattanooga, Tennessee.

FINANCIAL RATIOS  of  Astec Industries (ASTE)

Valuation Ratios
P/E Ratio 23.3
Price to Sales 1.1
Price to Book 2
Price to Tangible Book
Price to Cash Flow 9.5
Price to Free Cash Flow 11.9
Growth Rates
Sales Growth Rate 16.7%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate 28.6%
Cap. Spend. - 3 Yr. Gr. Rate -0.7%
Financial Strength
Quick Ratio 10
Current Ratio 0
LT Debt to Equity 0.5%
Total Debt to Equity 1.7%
Interest Coverage 88
Management Effectiveness
Return On Assets 6.9%
Ret/ On Assets - 3 Yr. Avg. 5.2%
Return On Total Capital 8.6%
Ret/ On T. Cap. - 3 Yr. Avg. 6.6%
Return On Equity 8.8%
Return On Equity - 3 Yr. Avg. 6.7%
Asset Turnover 1.4
Profitability Ratios
Gross Margin 23.1%
Gross Margin - 3 Yr. Avg. 22.5%
EBITDA Margin 9.9%
EBITDA Margin - 3 Yr. Avg. 8.6%
Operating Margin 7.6%
Oper. Margin - 3 Yr. Avg. 6%
Pre-Tax Margin 7.6%
Pre-Tax Margin - 3 Yr. Avg. 6.1%
Net Profit Margin 4.8%
Net Profit Margin - 3 Yr. Avg. 3.9%
Effective Tax Rate 36.8%
Eff/ Tax Rate - 3 Yr. Avg. 37.4%
Payout Ratio 16.4%

ASTE stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the ASTE stock intrinsic value calculation we used $1147 million for the last fiscal year's total revenue generated by Astec Industries. The default revenue input number comes from 2016 income statement of Astec Industries. You may change it if you feel that it should be adjusted for some unusual circumstances that are not expected to be repeated in the future or if you already know (from interim financial statements, for example) that this year's revenue is going to be quite different.

Revenue growth rate. Forecasted future revenue growth rate is the most important input parameter for the intrinsic value calculation. Unlike other input parameters that are reasonably expected to be in line with their historic averages or their historic trends, the revenue growth rate by and large is a wild card: nobody really knows what the company's revenue will be in the future. Of course, the level of unpredictability is different for different industries (utility companies being the most predictable and, thus, less risky).
    We use three input parameters to forecast the revenue growth rate in our ASTE stock valuation model: a) initial revenue growth rate of 52.1% whose default value is the revenue growth rate in the most recent quarter compared to the quarterly revenue a year ago; b) terminal revenue growth rate of 5% whose default value is chosen to be close to the average nominal (i.e. not adjusted for inflation) GDP growth rate; and c) revenue decline factor of 0.9, which stipulates that revenue growth rate in each forecasted year will be equal to the difference of the revenue growth rate in the preceding year and the terminal revenue growth rate multiplied by this revenue decline factor (with the passage of time the revenue growth rate will be approaching the terminal revenue growth rate, but not quite reaching it - though the difference could be infinitesimally small).
    At the revenue decline factor of 1, the future revenue growth rate is forecasted to be constant and equal to the initial revenue growth rate. The smaller the revenue decline factor, the faster the revenue growth rate will approach the terminal revenue growth.

Discount rate. The discount rate is used for determining the present value of future cash flows: future cash flows are "discounted" as at normal conditions (that translate into positive expected return on investment) one dollar today is worth more than the same dollar in the future. Unlike all other valuation models, we use variable discount rate, i.e. it increases for each consecutive year. This is done to account for higher risk of cash flows coming in further in the future.
    The initial discount rate of 4.3%, whose default value for ASTE is calculated based on our internal credit rating of Astec Industries, is applied to the cash flow expected to be received a year from now (well, actually, to be precise, in the financial year following the base year - the last year for which we have financial statements). For each consecutive year the discount rate is multiplied by the discount rate multiplier of 1.05, e.i. each year it increases by 5%. Feel free to change this number to correspond to your level of risk assessment of Astec Industries.
    By the way, it is easy to set the discount rate to be constant (this would make comparison with other valuation models easier): just set the discount rate multiplier equal to 1 and chose the magnitude of the initial discount rate to your liking.

Variable cost ratio is the ratio of variable costs (i.e. costs that fluctuate with fluctuation of the volume of production) to the revenue expressed as a percentage. In the calculation of intrinsic value of ASTE stock the variable cost ratio is equal to 77.4%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $176 million in the base year in the intrinsic value calculation for ASTE stock. These expenses increase with the level of inflation in subsequent years.

Interest rate on debt is the average all-in rate of interest paid by the company on its debt. It is set at 40% for Astec Industries.

Corporate tax rate of 27% is the nominal tax rate for Astec Industries. In reality, companies find ways to pay much less taxes than that or not to pay them at all.

Cash flow adjustment could be used for any adjustment the investor deems necessary. Most commonly we use this field to account for stock options-related effects in excess of what is reported on the company's income statement. The cash flow adjustment is expressed as a percentage of the revenue, and in the current valuation of the ASTE stock is equal to 0%.

Production assets are the company's assets used for manufacturing products or provision of services. In the valuation model input table they are expressed as a percentage of revenue and for ASTE are equal to 8.1%.

Life of production assets of 4.5 years is the average useful life of capital assets used in Astec Industries operations. It is used to calculate yearly capital expenditures needed to keep these assets in good order - we call it the maintenance CAPEX.

Working capital is the difference between the company's current assets and liabilities. In the model we use the ratio of working capital to revenue, which for ASTE is equal to 28.3%. A negative number means that the company is apt at using financial resources of its suppliers and customers; a large positive number, on the other hand, means that it either provides in-kind financing to others or is not good at managing its inventories.

Book value of equity - $649 million for Astec Industries - is used in calculation of the "floor" for intrinsic valuation based on the discounted cash flow (DCF) method. Even if the prospects are very bad for a company, its assets could always be sold now for their current fair market value.

Shares outstanding of 22.31 million for Astec Industries is needed to calculate the intrinsic value of one share.

Market capitalization is used here only for reference purposes and as a quick check that the share price and the number of shares outstanding numbers are correct - something especially to be cognizant about at stock splits. So, the market capitalization of Astec Industries at the current share price and the inputted number of shares is $1.2 billion.


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COMPANY NEWS

▶ Snap Returns To The Top Of Short-Seller Favorites   [Jun-06-17 04:05PM  Benzinga]
▶ Astec Industries misses 1Q profit forecasts   [Apr-25-17 08:16AM  Associated Press]
▶ Astec Industries misses 4Q profit forecasts   [07:54AM  Associated Press]
▶ Do Hedge Funds Love Astec Industries, Inc. (ASTE)?   [11:11AM  at Insider Monkey]
▶ Astec Industries, Inc. Completes Power Flame Acquisition   [Aug-01-16 02:37PM  GlobeNewswire]
Stock chart of ASTE Financial statements of ASTE Annual reports of ASTE
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