Intrinsic value of Amtech Systems - ASYS

Previous Close

$11.37

  Intrinsic Value

$224.01

stock screener

  Rating & Target

str. buy

+999%

Previous close

$11.37

 
Intrinsic value

$224.01

 
Up/down potential

+999%

 
Rating

str. buy

We calculate the intrinsic value of ASYS 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

Initial revenue growth rate, %
Terminal revenue growth rate, %
Revenue decline factor
Initial discount rate, %
Discount rate multiplier
Shares outstanding, mln

 

FINANCIAL STATEMENTS FORECAST and PRESENT VALUE CALCULATION

Fiscal year
2017(a)
   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
   2047

INCOME STATEMENT

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue growth rate, %
  37.50
  31.00
  28.40
  26.06
  23.95
  22.06
  20.35
  18.82
  17.44
  16.19
  15.07
  14.07
  13.16
  12.34
  11.61
  10.95
  10.35
  9.82
  9.34
  8.90
  8.51
  8.16
  7.84
  7.56
  7.30
  7.07
  6.87
  6.68
  6.51
  6.36
  6.22
Revenue, $m
  165
  216
  278
  350
  434
  529
  637
  757
  889
  1,033
  1,189
  1,356
  1,534
  1,723
  1,924
  2,134
  2,355
  2,586
  2,828
  3,080
  3,342
  3,614
  3,898
  4,193
  4,499
  4,817
  5,148
  5,492
  5,849
  6,221
  6,609
Variable operating expenses, $m
 
  124
  159
  200
  248
  302
  364
  432
  507
  589
  678
  772
  873
  981
  1,095
  1,215
  1,341
  1,472
  1,610
  1,753
  1,903
  2,058
  2,219
  2,387
  2,561
  2,743
  2,931
  3,127
  3,330
  3,542
  3,763
Fixed operating expenses, $m
 
  62
  63
  65
  66
  68
  70
  71
  73
  75
  77
  79
  81
  83
  85
  87
  89
  91
  94
  96
  98
  101
  103
  106
  109
  111
  114
  117
  120
  123
  126
Total operating expenses, $m
  154
  186
  222
  265
  314
  370
  434
  503
  580
  664
  755
  851
  954
  1,064
  1,180
  1,302
  1,430
  1,563
  1,704
  1,849
  2,001
  2,159
  2,322
  2,493
  2,670
  2,854
  3,045
  3,244
  3,450
  3,665
  3,889
Operating income, $m
  10
  30
  55
  85
  119
  159
  204
  254
  309
  369
  434
  505
  580
  660
  744
  832
  925
  1,023
  1,124
  1,230
  1,341
  1,456
  1,575
  1,700
  1,829
  1,963
  2,103
  2,248
  2,399
  2,557
  2,720
EBITDA, $m
  12
  33
  59
  89
  124
  164
  210
  261
  317
  378
  444
  516
  592
  673
  759
  849
  944
  1,043
  1,146
  1,254
  1,367
  1,484
  1,606
  1,732
  1,864
  2,001
  2,143
  2,291
  2,445
  2,605
  2,772
Interest expense (income), $m
  0
  0
  1
  3
  4
  6
  8
  10
  13
  16
  19
  22
  26
  30
  34
  38
  43
  48
  53
  58
  63
  69
  75
  81
  87
  94
  101
  108
  115
  123
  131
Earnings before tax, $m
  10
  30
  54
  82
  115
  153
  196
  243
  296
  353
  415
  483
  554
  630
  710
  794
  882
  975
  1,072
  1,172
  1,278
  1,387
  1,501
  1,619
  1,742
  1,869
  2,002
  2,140
  2,284
  2,433
  2,589
Tax expense, $m
  2
  8
  15
  22
  31
  41
  53
  66
  80
  95
  112
  130
  150
  170
  192
  214
  238
  263
  289
  317
  345
  374
  405
  437
  470
  505
  541
  578
  617
  657
  699
Net income, $m
  9
  22
  39
  60
  84
  112
  143
  177
  216
  258
  303
  352
  404
  460
  518
  580
  644
  712
  782
  856
  933
  1,012
  1,095
  1,182
  1,271
  1,365
  1,462
  1,562
  1,667
  1,776
  1,890

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  51
  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
  192
  185
  237
  299
  371
  452
  544
  647
  760
  883
  1,016
  1,159
  1,311
  1,473
  1,644
  1,824
  2,013
  2,211
  2,417
  2,632
  2,856
  3,089
  3,332
  3,583
  3,845
  4,117
  4,400
  4,694
  4,999
  5,317
  5,648
Adjusted assets (=assets-cash), $m
  141
  185
  237
  299
  371
  452
  544
  647
  760
  883
  1,016
  1,159
  1,311
  1,473
  1,644
  1,824
  2,013
  2,211
  2,417
  2,632
  2,856
  3,089
  3,332
  3,583
  3,845
  4,117
  4,400
  4,694
  4,999
  5,317
  5,648
Revenue / Adjusted assets
  1.170
  1.168
  1.173
  1.171
  1.170
  1.170
  1.171
  1.170
  1.170
  1.170
  1.170
  1.170
  1.170
  1.170
  1.170
  1.170
  1.170
  1.170
  1.170
  1.170
  1.170
  1.170
  1.170
  1.170
  1.170
  1.170
  1.170
  1.170
  1.170
  1.170
  1.170
Average production assets, $m
  20
  26
  34
  42
  52
  64
  77
  92
  108
  125
  144
  164
  186
  209
  233
  258
  285
  313
  342
  373
  404
  437
  472
  507
  544
  583
  623
  664
  708
  753
  800
Working capital, $m
  71
  26
  34
  42
  52
  64
  77
  92
  108
  125
  144
  164
  186
  209
  233
  258
  285
  313
  342
  373
  404
  437
  472
  507
  544
  583
  623
  664
  708
  753
  800
Total debt, $m
  8
  40
  78
  122
  174
  233
  300
  374
  455
  544
  640
  744
  854
  971
  1,095
  1,225
  1,361
  1,504
  1,653
  1,809
  1,971
  2,139
  2,315
  2,497
  2,686
  2,883
  3,087
  3,300
  3,521
  3,750
  3,990
Total liabilities, $m
  101
  134
  172
  216
  268
  327
  394
  468
  549
  638
  734
  838
  948
  1,065
  1,189
  1,319
  1,455
  1,598
  1,747
  1,903
  2,065
  2,233
  2,409
  2,591
  2,780
  2,977
  3,181
  3,394
  3,615
  3,844
  4,084
Total equity, $m
  90
  51
  66
  83
  103
  125
  151
  179
  210
  245
  281
  321
  363
  408
  455
  505
  558
  612
  669
  729
  791
  856
  923
  993
  1,065
  1,140
  1,219
  1,300
  1,385
  1,473
  1,565
Total liabilities and equity, $m
  191
  185
  238
  299
  371
  452
  545
  647
  759
  883
  1,015
  1,159
  1,311
  1,473
  1,644
  1,824
  2,013
  2,210
  2,416
  2,632
  2,856
  3,089
  3,332
  3,584
  3,845
  4,117
  4,400
  4,694
  5,000
  5,317
  5,649
Debt-to-equity ratio
  0.089
  0.770
  1.180
  1.480
  1.690
  1.860
  1.990
  2.090
  2.160
  2.230
  2.280
  2.320
  2.350
  2.380
  2.400
  2.420
  2.440
  2.460
  2.470
  2.480
  2.490
  2.500
  2.510
  2.520
  2.520
  2.530
  2.530
  2.540
  2.540
  2.550
  2.550
Adjusted equity ratio
  0.277
  0.277
  0.277
  0.277
  0.277
  0.277
  0.277
  0.277
  0.277
  0.277
  0.277
  0.277
  0.277
  0.277
  0.277
  0.277
  0.277
  0.277
  0.277
  0.277
  0.277
  0.277
  0.277
  0.277
  0.277
  0.277
  0.277
  0.277
  0.277
  0.277
  0.277

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  9
  22
  39
  60
  84
  112
  143
  177
  216
  258
  303
  352
  404
  460
  518
  580
  644
  712
  782
  856
  933
  1,012
  1,095
  1,182
  1,271
  1,365
  1,462
  1,562
  1,667
  1,776
  1,890
Depreciation, amort., depletion, $m
  2
  3
  3
  4
  4
  5
  6
  7
  8
  9
  10
  11
  12
  13
  15
  17
  18
  20
  22
  24
  26
  28
  30
  33
  35
  38
  40
  43
  46
  49
  52
Funds from operations, $m
  11
  25
  43
  64
  89
  117
  149
  184
  224
  267
  313
  363
  416
  473
  533
  596
  662
  732
  804
  880
  959
  1,041
  1,126
  1,214
  1,306
  1,402
  1,502
  1,605
  1,713
  1,825
  1,942
Change in working capital, $m
  -1
  6
  7
  9
  10
  12
  13
  15
  16
  17
  19
  20
  22
  23
  24
  25
  27
  28
  29
  30
  32
  33
  34
  36
  37
  39
  40
  42
  43
  45
  47
Cash from operations, $m
  12
  19
  35
  55
  78
  105
  136
  170
  208
  249
  294
  343
  395
  450
  509
  571
  636
  704
  775
  849
  927
  1,008
  1,091
  1,179
  1,269
  1,364
  1,462
  1,564
  1,670
  1,780
  1,895
Maintenance CAPEX, $m
  0
  -1
  -2
  -2
  -3
  -3
  -4
  -5
  -6
  -7
  -8
  -9
  -11
  -12
  -13
  -15
  -17
  -18
  -20
  -22
  -24
  -26
  -28
  -30
  -33
  -35
  -38
  -40
  -43
  -46
  -49
New CAPEX, $m
  -1
  -6
  -7
  -9
  -10
  -12
  -13
  -15
  -16
  -17
  -19
  -20
  -22
  -23
  -24
  -25
  -27
  -28
  -29
  -30
  -32
  -33
  -34
  -36
  -37
  -39
  -40
  -42
  -43
  -45
  -47
Cash from investing activities, $m
  -1
  -7
  -9
  -11
  -13
  -15
  -17
  -20
  -22
  -24
  -27
  -29
  -33
  -35
  -37
  -40
  -44
  -46
  -49
  -52
  -56
  -59
  -62
  -66
  -70
  -74
  -78
  -82
  -86
  -91
  -96
Free cash flow, $m
  11
  11
  26
  44
  66
  90
  119
  150
  186
  225
  268
  313
  363
  415
  471
  530
  592
  658
  726
  797
  871
  949
  1,029
  1,113
  1,200
  1,290
  1,384
  1,482
  1,583
  1,689
  1,799
Issuance/(repayment) of debt, $m
  0
  32
  38
  45
  52
  59
  67
  74
  82
  89
  96
  103
  110
  117
  124
  130
  137
  143
  149
  156
  162
  169
  175
  182
  189
  197
  204
  212
  221
  230
  239
Issuance/(repurchase) of shares, $m
  13
  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 from financing (excl. dividends), $m  
  13
  32
  38
  45
  52
  59
  67
  74
  82
  89
  96
  103
  110
  117
  124
  130
  137
  143
  149
  156
  162
  169
  175
  182
  189
  197
  204
  212
  221
  230
  239
Total cash flow (excl. dividends), $m
  23
  43
  64
  89
  117
  149
  185
  225
  267
  314
  364
  417
  473
  532
  595
  660
  729
  800
  875
  952
  1,033
  1,117
  1,204
  1,295
  1,389
  1,487
  1,588
  1,694
  1,804
  1,919
  2,039
Retained Cash Flow (-), $m
  -23
  -12
  -15
  -17
  -20
  -23
  -26
  -28
  -31
  -34
  -37
  -40
  -42
  -45
  -47
  -50
  -52
  -55
  -57
  -60
  -62
  -65
  -67
  -70
  -73
  -75
  -78
  -81
  -85
  -88
  -92
Prev. year cash balance distribution, $m
 
  51
  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
 
  82
  50
  72
  97
  127
  160
  196
  236
  280
  327
  377
  431
  487
  547
  610
  677
  746
  818
  893
  971
  1,052
  1,137
  1,225
  1,316
  1,411
  1,510
  1,613
  1,720
  1,831
  1,947
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
 
  78
  45
  62
  80
  98
  116
  133
  148
  161
  171
  179
  184
  185
  184
  179
  172
  162
  151
  137
  123
  109
  94
  80
  67
  55
  44
  35
  27
  20
  15
Current shareholders' claim on cash, %
  100
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0

Amtech Systems, Inc. is engaged in the manufacture of capital equipment, including thermal processing, silicon wafer handling automation and related consumables used in fabricating solar cells, Light Emitting Diode (LED) and semiconductor devices. The Company operates through three business segments: solar, semiconductor and polishing. The solar segment supplies thermal processing systems, including diffusion; plasma-enhanced chemical vapor deposition (PECVD); atomic layer deposition (ALD), and related automation, parts and services to the solar/photovoltaic industry. The semiconductor segment supplies thermal processing equipment, including solder reflow equipment and related controls for use by the semiconductor manufacturers and in electronics assembly for automotive and other industries. The polishing supplies segment produces consumables and machinery for lapping (fine abrading) and polishing of materials, such as sapphire substrates and optical components.

FINANCIAL RATIOS  of  Amtech Systems (ASYS)

Valuation Ratios
P/E Ratio 18.6
Price to Sales 1
Price to Book 1.9
Price to Tangible Book
Price to Cash Flow 13.9
Price to Free Cash Flow 15.2
Growth Rates
Sales Growth Rate 37.5%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate 0%
Cap. Spend. - 3 Yr. Gr. Rate NaN%
Financial Strength
Quick Ratio NaN
Current Ratio 0.5
LT Debt to Equity 8.9%
Total Debt to Equity 8.9%
Interest Coverage 0
Management Effectiveness
Return On Assets 5.8%
Ret/ On Assets - 3 Yr. Avg. -2.5%
Return On Total Capital 10.3%
Ret/ On T. Cap. - 3 Yr. Avg. -3.4%
Return On Equity 11.5%
Return On Equity - 3 Yr. Avg. -3.7%
Asset Turnover 1.1
Profitability Ratios
Gross Margin 31.5%
Gross Margin - 3 Yr. Avg. 28.5%
EBITDA Margin 7.3%
EBITDA Margin - 3 Yr. Avg. 1.2%
Operating Margin 6.7%
Oper. Margin - 3 Yr. Avg. -4.1%
Pre-Tax Margin 6.1%
Pre-Tax Margin - 3 Yr. Avg. -1%
Net Profit Margin 5.5%
Net Profit Margin - 3 Yr. Avg. -2.7%
Effective Tax Rate 20%
Eff/ Tax Rate - 3 Yr. Avg. -33.3%
Payout Ratio 0%

ASYS stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the ASYS stock intrinsic value calculation we used $165 million for the last fiscal year's total revenue generated by Amtech Systems. The default revenue input number comes from 2017 income statement of Amtech Systems. 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 ASYS stock valuation model: a) initial revenue growth rate of 31% 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 ASYS is calculated based on our internal credit rating of Amtech Systems, 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 Amtech Systems.
    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 ASYS stock the variable cost ratio is equal to 57.6%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $60 million in the base year in the intrinsic value calculation for ASYS 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 3.5% for Amtech Systems.

Corporate tax rate of 27% is the nominal tax rate for Amtech Systems. 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 ASYS 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 ASYS are equal to 12.1%.

Life of production assets of 15.5 years is the average useful life of capital assets used in Amtech Systems 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 ASYS is equal to 12.1%. 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 - $90 million for Amtech Systems - 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 14.848 million for Amtech Systems 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 Amtech Systems at the current share price and the inputted number of shares is $0.2 billion.

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COMPANY NEWS

▶ Is It Time To Buy Amtech Systems Inc (ASYS)?   [Nov-20-17 07:04PM  Simply Wall St.]
▶ Amtech posts 4Q profit   [04:35PM  Associated Press]
▶ 5 Stocks in Focus on New Analyst Coverage   [Oct-25-17 08:36AM  Zacks]
▶ Amtech posts 3Q profit   [Aug-09-17 10:20PM  Associated Press]
▶ Amtech (ASYS) in Focus: Stock Moves 5.1% Higher   [Jun-08-17 08:35AM  Zacks]
▶ ETFs with exposure to Amtech Systems, Inc. : May 30, 2017   [May-30-17 12:17PM  Capital Cube]
▶ Amtech Systems reports big revenue increase, record solar bookings   [May-11-17 01:15AM  American City Business Journals]
▶ Amtech reports 2Q loss   [May-10-17 05:22PM  Associated Press]
▶ Amtech posts 1Q loss   [Feb-09-17 06:21PM  Associated Press]
▶ Amtech Systems shrinks quarterly loss on lower revenue   [Aug-04-16 06:56PM  at bizjournals.com]
▶ Amtech reports 3Q loss   [05:25PM  AP]
▶ Amtech Announces New Solar Orders   [Mar-17-16 09:00AM  PR Newswire]
Financial statements of ASYS
Valuation of Stocks

The paper VALUATION OF STOCKS: The Quest for Intrinsic Value provides a detailed description of our valuation model and discloses the calculation algorithm.

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