Intrinsic value of L3 Technologies, Inc. - LLL

Previous Close

$245.17

  Intrinsic Value

$2,133

stock screener

  Rating & Target

str. buy

+770%

Previous close

$245.17

 
Intrinsic value

$2,133

 
Up/down potential

+770%

 
Rating

str. buy

We calculate the intrinsic value of LLL 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
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, %
  0.43
  60.00
  54.50
  49.55
  45.10
  41.09
  37.48
  34.23
  31.31
  28.68
  26.31
  24.18
  22.26
  20.53
  18.98
  17.58
  16.32
  15.19
  14.17
  13.26
  12.43
  11.69
  11.02
  10.42
  9.87
  9.39
  8.95
  8.55
  8.20
  7.88
  7.59
Revenue, $m
  10,511
  16,390
  25,323
  37,871
  54,949
  77,525
  106,578
  143,059
  187,846
  241,712
  305,302
  379,116
  463,506
  558,680
  664,719
  781,592
  909,179
  1,047,298
  1,195,725
  1,354,221
  1,522,547
  1,700,482
  1,887,842
  2,084,484
  2,290,319
  2,505,315
  2,729,501
  2,962,972
  3,205,883
  3,458,456
  3,720,973
Variable operating expenses, $m
 
  13,779
  20,896
  30,893
  44,499
  62,486
  85,634
  114,700
  150,383
  193,300
  243,965
  302,055
  369,291
  445,120
  529,605
  622,721
  724,374
  834,418
  952,676
  1,078,955
  1,213,065
  1,354,833
  1,504,109
  1,660,780
  1,824,776
  1,996,071
  2,174,688
  2,360,702
  2,554,238
  2,755,471
  2,964,627
Fixed operating expenses, $m
 
  249
  255
  260
  266
  272
  278
  284
  290
  297
  303
  310
  317
  324
  331
  338
  346
  353
  361
  369
  377
  385
  394
  402
  411
  420
  430
  439
  449
  459
  469
Total operating expenses, $m
  9,510
  14,028
  21,151
  31,153
  44,765
  62,758
  85,912
  114,984
  150,673
  193,597
  244,268
  302,365
  369,608
  445,444
  529,936
  623,059
  724,720
  834,771
  953,037
  1,079,324
  1,213,442
  1,355,218
  1,504,503
  1,661,182
  1,825,187
  1,996,491
  2,175,118
  2,361,141
  2,554,687
  2,755,930
  2,965,096
Operating income, $m
  1,001
  2,362
  4,173
  6,718
  10,183
  14,766
  20,666
  28,075
  37,172
  48,115
  61,034
  76,751
  93,898
  113,237
  134,784
  158,532
  184,459
  212,526
  242,689
  274,898
  309,104
  345,264
  383,339
  423,301
  465,132
  508,824
  554,384
  601,831
  651,197
  702,526
  755,877
EBITDA, $m
  1,207
  3,331
  5,277
  8,012
  11,736
  16,662
  23,002
  30,965
  40,741
  52,501
  66,384
  82,501
  100,928
  121,710
  144,865
  170,387
  198,248
  228,410
  260,824
  295,437
  332,196
  371,055
  411,972
  454,916
  499,868
  546,821
  595,781
  646,769
  699,819
  754,979
  812,311
Interest expense (income), $m
  162
  179
  428
  789
  1,297
  1,988
  2,902
  4,077
  5,553
  7,366
  9,545
  12,119
  15,105
  18,520
  22,371
  26,662
  31,391
  36,554
  42,143
  48,149
  54,562
  61,374
  68,574
  76,155
  84,112
  92,441
  101,141
  110,212
  119,659
  129,489
  139,709
Earnings before tax, $m
  850
  2,183
  3,745
  5,928
  8,886
  12,778
  17,764
  23,998
  31,619
  40,749
  51,489
  64,633
  78,793
  94,716
  112,412
  131,870
  153,068
  175,972
  200,546
  226,749
  254,542
  283,890
  314,766
  347,146
  381,020
  416,383
  453,243
  491,619
  531,537
  573,037
  616,168
Tax expense, $m
  189
  589
  1,011
  1,601
  2,399
  3,450
  4,796
  6,479
  8,537
  11,002
  13,902
  17,451
  21,274
  25,573
  30,351
  35,605
  41,328
  47,513
  54,147
  61,222
  68,726
  76,650
  84,987
  93,729
  102,875
  112,423
  122,376
  132,737
  143,515
  154,720
  166,365
Net income, $m
  710
  1,594
  2,734
  4,328
  6,487
  9,328
  12,968
  17,518
  23,082
  29,747
  37,587
  47,182
  57,519
  69,143
  82,061
  96,265
  111,739
  128,460
  146,398
  165,526
  185,815
  207,240
  229,779
  253,417
  278,144
  303,959
  330,868
  358,882
  388,022
  418,317
  449,802

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  363
  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
  11,865
  21,623
  33,408
  49,961
  72,492
  102,275
  140,605
  188,733
  247,818
  318,882
  402,773
  500,153
  611,485
  737,045
  876,938
  1,031,123
  1,199,444
  1,381,659
  1,577,474
  1,786,571
  2,008,637
  2,243,380
  2,490,557
  2,749,979
  3,021,529
  3,305,165
  3,600,925
  3,908,934
  4,229,397
  4,562,607
  4,908,935
Adjusted assets (=assets-cash), $m
  11,502
  21,623
  33,408
  49,961
  72,492
  102,275
  140,605
  188,733
  247,818
  318,882
  402,773
  500,153
  611,485
  737,045
  876,938
  1,031,123
  1,199,444
  1,381,659
  1,577,474
  1,786,571
  2,008,637
  2,243,380
  2,490,557
  2,749,979
  3,021,529
  3,305,165
  3,600,925
  3,908,934
  4,229,397
  4,562,607
  4,908,935
Revenue / Adjusted assets
  0.914
  0.758
  0.758
  0.758
  0.758
  0.758
  0.758
  0.758
  0.758
  0.758
  0.758
  0.758
  0.758
  0.758
  0.758
  0.758
  0.758
  0.758
  0.758
  0.758
  0.758
  0.758
  0.758
  0.758
  0.758
  0.758
  0.758
  0.758
  0.758
  0.758
  0.758
Average production assets, $m
  1,328
  7,458
  11,522
  17,231
  25,002
  35,274
  48,493
  65,092
  85,470
  109,979
  138,912
  172,498
  210,895
  254,199
  302,447
  355,624
  413,676
  476,520
  544,055
  616,171
  692,759
  773,719
  858,968
  948,440
  1,042,095
  1,139,918
  1,241,923
  1,348,152
  1,458,677
  1,573,597
  1,693,043
Working capital, $m
  1,562
  2,082
  3,216
  4,810
  6,978
  9,846
  13,535
  18,169
  23,856
  30,697
  38,773
  48,148
  58,865
  70,952
  84,419
  99,262
  115,466
  133,007
  151,857
  171,986
  193,363
  215,961
  239,756
  264,729
  290,871
  318,175
  346,647
  376,297
  407,147
  439,224
  472,564
Total debt, $m
  3,338
  7,924
  14,618
  24,020
  36,817
  53,734
  75,505
  102,842
  136,403
  176,767
  224,417
  279,729
  342,965
  414,284
  493,743
  581,320
  676,926
  780,424
  891,647
  1,010,415
  1,136,548
  1,269,882
  1,410,278
  1,557,630
  1,711,871
  1,872,976
  2,040,968
  2,215,916
  2,397,940
  2,587,203
  2,783,917
Total liabilities, $m
  7,312
  12,282
  18,976
  28,378
  41,175
  58,092
  79,863
  107,200
  140,761
  181,125
  228,775
  284,087
  347,323
  418,642
  498,101
  585,678
  681,284
  784,782
  896,005
  1,014,773
  1,140,906
  1,274,240
  1,414,636
  1,561,988
  1,716,229
  1,877,334
  2,045,326
  2,220,274
  2,402,298
  2,591,561
  2,788,275
Total equity, $m
  4,553
  9,341
  14,432
  21,583
  31,316
  44,183
  60,741
  81,533
  107,057
  137,757
  173,998
  216,066
  264,162
  318,403
  378,837
  445,445
  518,160
  596,877
  681,469
  771,799
  867,731
  969,140
  1,075,921
  1,187,991
  1,305,301
  1,427,831
  1,555,600
  1,688,659
  1,827,100
  1,971,046
  2,120,660
Total liabilities and equity, $m
  11,865
  21,623
  33,408
  49,961
  72,491
  102,275
  140,604
  188,733
  247,818
  318,882
  402,773
  500,153
  611,485
  737,045
  876,938
  1,031,123
  1,199,444
  1,381,659
  1,577,474
  1,786,572
  2,008,637
  2,243,380
  2,490,557
  2,749,979
  3,021,530
  3,305,165
  3,600,926
  3,908,933
  4,229,398
  4,562,607
  4,908,935
Debt-to-equity ratio
  0.733
  0.850
  1.010
  1.110
  1.180
  1.220
  1.240
  1.260
  1.270
  1.280
  1.290
  1.290
  1.300
  1.300
  1.300
  1.310
  1.310
  1.310
  1.310
  1.310
  1.310
  1.310
  1.310
  1.310
  1.310
  1.310
  1.310
  1.310
  1.310
  1.310
  1.310
Adjusted equity ratio
  0.364
  0.432
  0.432
  0.432
  0.432
  0.432
  0.432
  0.432
  0.432
  0.432
  0.432
  0.432
  0.432
  0.432
  0.432
  0.432
  0.432
  0.432
  0.432
  0.432
  0.432
  0.432
  0.432
  0.432
  0.432
  0.432
  0.432
  0.432
  0.432
  0.432
  0.432

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  710
  1,594
  2,734
  4,328
  6,487
  9,328
  12,968
  17,518
  23,082
  29,747
  37,587
  47,182
  57,519
  69,143
  82,061
  96,265
  111,739
  128,460
  146,398
  165,526
  185,815
  207,240
  229,779
  253,417
  278,144
  303,959
  330,868
  358,882
  388,022
  418,317
  449,802
Depreciation, amort., depletion, $m
  206
  968
  1,104
  1,294
  1,553
  1,896
  2,336
  2,890
  3,569
  4,386
  5,350
  5,750
  7,030
  8,473
  10,082
  11,854
  13,789
  15,884
  18,135
  20,539
  23,092
  25,791
  28,632
  31,615
  34,737
  37,997
  41,397
  44,938
  48,623
  52,453
  56,435
Funds from operations, $m
  998
  2,562
  3,838
  5,622
  8,040
  11,224
  15,304
  20,408
  26,651
  34,133
  42,937
  52,932
  64,548
  77,616
  92,143
  108,119
  125,529
  144,344
  164,534
  186,065
  208,907
  233,031
  258,411
  285,031
  312,881
  341,957
  372,265
  403,820
  436,645
  470,771
  506,237
Change in working capital, $m
  -43
  781
  1,134
  1,594
  2,169
  2,867
  3,690
  4,633
  5,688
  6,841
  8,076
  9,374
  10,717
  12,087
  13,467
  14,843
  16,204
  17,541
  18,850
  20,129
  21,377
  22,598
  23,795
  24,974
  26,141
  27,304
  28,472
  29,651
  30,850
  32,077
  33,340
Cash from operations, $m
  1,041
  1,781
  2,703
  4,028
  5,871
  8,356
  11,614
  15,775
  20,963
  27,292
  34,861
  43,557
  53,831
  65,529
  78,676
  93,277
  109,325
  126,803
  145,683
  165,937
  187,530
  210,433
  234,617
  260,058
  286,740
  314,652
  343,793
  374,169
  405,795
  438,694
  472,898
Maintenance CAPEX, $m
  0
  -156
  -249
  -384
  -574
  -833
  -1,176
  -1,616
  -2,170
  -2,849
  -3,666
  -4,630
  -5,750
  -7,030
  -8,473
  -10,082
  -11,854
  -13,789
  -15,884
  -18,135
  -20,539
  -23,092
  -25,791
  -28,632
  -31,615
  -34,737
  -37,997
  -41,397
  -44,938
  -48,623
  -52,453
New CAPEX, $m
  -216
  -2,792
  -4,064
  -5,709
  -7,770
  -10,272
  -13,219
  -16,599
  -20,378
  -24,509
  -28,933
  -33,585
  -38,397
  -43,304
  -48,248
  -53,177
  -58,052
  -62,844
  -67,535
  -72,116
  -76,588
  -80,961
  -85,249
  -89,472
  -93,655
  -97,823
  -102,005
  -106,229
  -110,525
  -114,921
  -119,445
Cash from investing activities, $m
  -16
  -2,948
  -4,313
  -6,093
  -8,344
  -11,105
  -14,395
  -18,215
  -22,548
  -27,358
  -32,599
  -38,215
  -44,147
  -50,334
  -56,721
  -63,259
  -69,906
  -76,633
  -83,419
  -90,251
  -97,127
  -104,053
  -111,040
  -118,104
  -125,270
  -132,560
  -140,002
  -147,626
  -155,463
  -163,544
  -171,898
Free cash flow, $m
  1,025
  -1,166
  -1,610
  -2,065
  -2,474
  -2,749
  -2,781
  -2,440
  -1,585
  -66
  2,262
  5,342
  9,684
  15,195
  21,955
  30,018
  39,419
  50,169
  62,265
  75,686
  90,403
  106,380
  123,577
  141,953
  161,470
  182,093
  203,791
  226,543
  250,332
  275,151
  300,999
Issuance/(repayment) of debt, $m
  -309
  4,603
  6,694
  9,402
  12,797
  16,917
  21,771
  27,337
  33,560
  40,364
  47,651
  55,312
  63,237
  71,318
  79,459
  87,577
  95,606
  103,498
  111,223
  118,767
  126,133
  133,334
  140,396
  147,352
  154,240
  161,105
  167,992
  174,949
  182,023
  189,263
  196,714
Issuance/(repurchase) of shares, $m
  -310
  1,909
  2,357
  2,824
  3,246
  3,538
  3,591
  3,273
  2,443
  952
  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  
  -636
  6,512
  9,051
  12,226
  16,043
  20,455
  25,362
  30,610
  36,003
  41,316
  47,651
  55,312
  63,237
  71,318
  79,459
  87,577
  95,606
  103,498
  111,223
  118,767
  126,133
  133,334
  140,396
  147,352
  154,240
  161,105
  167,992
  174,949
  182,023
  189,263
  196,714
Total cash flow (excl. dividends), $m
  376
  5,346
  7,441
  10,161
  13,570
  17,707
  22,581
  28,169
  34,419
  41,250
  49,912
  60,653
  72,920
  86,513
  101,414
  117,595
  135,025
  153,667
  173,488
  194,453
  216,536
  239,715
  263,973
  289,305
  315,711
  343,198
  371,783
  401,492
  432,355
  464,414
  497,714
Retained Cash Flow (-), $m
  -198
  -3,502
  -5,091
  -7,151
  -9,733
  -12,866
  -16,558
  -20,791
  -25,525
  -30,699
  -36,241
  -42,068
  -48,095
  -54,242
  -60,434
  -66,608
  -72,715
  -78,717
  -84,592
  -90,330
  -95,932
  -101,409
  -106,780
  -112,070
  -117,310
  -122,531
  -127,769
  -133,060
  -138,440
  -143,946
  -149,614
Prev. year cash balance distribution, $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 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
 
  1,843
  2,350
  3,010
  3,837
  4,840
  6,022
  7,378
  8,894
  10,551
  13,671
  18,585
  24,825
  32,271
  40,980
  50,987
  62,310
  74,951
  88,895
  104,123
  120,604
  138,305
  157,193
  177,235
  198,401
  220,667
  244,015
  268,432
  293,915
  320,467
  348,100
Discount rate, %
 
  4.60
  4.83
  5.07
  5.33
  5.59
  5.87
  6.16
  6.47
  6.80
  7.14
  7.49
  7.87
  8.26
  8.67
  9.11
  9.56
  10.04
  10.54
  11.07
  11.62
  12.21
  12.82
  13.46
  14.13
  14.84
  15.58
  16.36
  17.17
  18.03
  18.93
PV of cash for distribution, $m
 
  1,762
  2,139
  2,595
  3,118
  3,687
  4,277
  4,854
  5,385
  5,838
  6,862
  8,394
  10,005
  11,500
  12,788
  13,792
  14,452
  14,734
  14,632
  14,164
  13,372
  12,319
  11,075
  9,716
  8,318
  6,948
  5,659
  4,493
  3,475
  2,617
  1,916
Current shareholders' claim on cash, %
  100
  91.1
  84.7
  80.0
  76.5
  74.0
  72.2
  71.1
  70.4
  70.3
  70.3
  70.3
  70.3
  70.3
  70.3
  70.3
  70.3
  70.3
  70.3
  70.3
  70.3
  70.3
  70.3
  70.3
  70.3
  70.3
  70.3
  70.3
  70.3
  70.3
  70.3

L3 Technologies, Inc., formerly L-3 Communications Holdings, Inc., is a prime contractor in Intelligence, Surveillance and Reconnaissance (ISR) systems, aircraft sustainment, simulation and training, night vision and image intensification equipment and security and detection systems. The Company provides a broad range of communication and electronic systems and products used on military and commercial platforms. It operates through four segments: Electronic Systems, Aerospace Systems, Communication Systems and Sensor Systems. Electronic Systems provides a broad range of products and services for military and commercial customers in several niche markets across several business areas. Aerospace Systems delivers integrated solutions and provides engineering, modernization, upgrade, sustainment, and maintenance and logistics support. Communication Systems delivers products and services for the global communications market. Sensor Systems provides diverse sensor technologies.

FINANCIAL RATIOS  of  L3 Technologies, Inc. (LLL)

Valuation Ratios
P/E Ratio 26.7
Price to Sales 1.8
Price to Book 4.2
Price to Tangible Book
Price to Cash Flow 18.2
Price to Free Cash Flow 23
Growth Rates
Sales Growth Rate 0.4%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate 9.6%
Cap. Spend. - 3 Yr. Gr. Rate 1.1%
Financial Strength
Quick Ratio NaN
Current Ratio 1.1
LT Debt to Equity 73.3%
Total Debt to Equity 73.3%
Interest Coverage 6
Management Effectiveness
Return On Assets 7%
Ret/ On Assets - 3 Yr. Avg. 4.1%
Return On Total Capital 8.9%
Ret/ On T. Cap. - 3 Yr. Avg. 4.4%
Return On Equity 15.9%
Return On Equity - 3 Yr. Avg. 7.6%
Asset Turnover 0.9
Profitability Ratios
Gross Margin 9.6%
Gross Margin - 3 Yr. Avg. 9.1%
EBITDA Margin 11.6%
EBITDA Margin - 3 Yr. Avg. 10%
Operating Margin 9.5%
Oper. Margin - 3 Yr. Avg. 7.8%
Pre-Tax Margin 8.1%
Pre-Tax Margin - 3 Yr. Avg. 6.4%
Net Profit Margin 6.8%
Net Profit Margin - 3 Yr. Avg. 3.5%
Effective Tax Rate 22.2%
Eff/ Tax Rate - 3 Yr. Avg. 18.7%
Payout Ratio 31%

LLL stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the LLL stock intrinsic value calculation we used $10244 million for the last fiscal year's total revenue generated by L3 Technologies, Inc.. The default revenue input number comes from 2016 income statement of L3 Technologies, Inc.. 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 LLL stock valuation model: a) initial revenue growth rate of 60% 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 4.6%, whose default value for LLL is calculated based on our internal credit rating of L3 Technologies, Inc., 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 L3 Technologies, Inc..
    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 LLL stock the variable cost ratio is equal to 86.7%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $244 million in the base year in the intrinsic value calculation for LLL 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 5.4% for L3 Technologies, Inc..

Corporate tax rate of 27% is the nominal tax rate for L3 Technologies, Inc.. 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 LLL 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 LLL are equal to 45.5%.

Life of production assets of 34 years is the average useful life of capital assets used in L3 Technologies, Inc. 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 LLL is equal to 12.7%. 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 - $5839 million for L3 Technologies, Inc. - 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 79.345 million for L3 Technologies, Inc. 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 L3 Technologies, Inc. at the current share price and the inputted number of shares is $19.5 billion.

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