Intrinsic value of MTS Systems - MTSC

Previous Close

$53.10

  Intrinsic Value

$223.96

stock screener

  Rating & Target

str. buy

+322%

  Value-price divergence*

+1%

Previous close

$53.10

 
Intrinsic value

$223.96

 
Up/down potential

+322%

 
Rating

str. buy

 
Value-price divergence*

+1%

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

We calculate the intrinsic value of MTSC 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 0.9

 

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, %
  15.25
  40.90
  37.31
  34.08
  31.17
  28.55
  26.20
  24.08
  22.17
  20.45
  18.91
  17.52
  16.27
  15.14
  14.13
  13.21
  12.39
  11.65
  10.99
  10.39
  9.85
  9.36
  8.93
  8.54
  8.18
  7.86
  7.58
  7.32
  7.09
  6.88
  6.69
Revenue, $m
  650
  916
  1,258
  1,686
  2,212
  2,843
  3,588
  4,452
  5,439
  6,552
  7,790
  9,155
  10,644
  12,256
  13,987
  15,835
  17,797
  19,871
  22,054
  24,345
  26,743
  29,248
  31,859
  34,578
  37,407
  40,349
  43,406
  46,583
  49,885
  53,316
  56,884
Variable operating expenses, $m
 
  801
  1,086
  1,443
  1,882
  2,408
  3,030
  3,750
  4,574
  5,502
  6,535
  7,636
  8,878
  10,222
  11,666
  13,208
  14,844
  16,574
  18,395
  20,306
  22,306
  24,395
  26,573
  28,841
  31,201
  33,654
  36,204
  38,854
  41,608
  44,470
  47,446
Fixed operating expenses, $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
Total operating expenses, $m
  608
  801
  1,086
  1,443
  1,882
  2,408
  3,030
  3,750
  4,574
  5,502
  6,535
  7,636
  8,878
  10,222
  11,666
  13,208
  14,844
  16,574
  18,395
  20,306
  22,306
  24,395
  26,573
  28,841
  31,201
  33,654
  36,204
  38,854
  41,608
  44,470
  47,446
Operating income, $m
  42
  115
  172
  243
  330
  435
  558
  702
  865
  1,050
  1,256
  1,519
  1,766
  2,034
  2,321
  2,627
  2,953
  3,297
  3,659
  4,039
  4,437
  4,853
  5,286
  5,737
  6,207
  6,695
  7,202
  7,729
  8,277
  8,846
  9,438
EBITDA, $m
  66
  170
  234
  313
  411
  529
  667
  828
  1,011
  1,218
  1,448
  1,702
  1,979
  2,279
  2,600
  2,944
  3,309
  3,694
  4,100
  4,526
  4,972
  5,438
  5,923
  6,429
  6,955
  7,502
  8,070
  8,661
  9,275
  9,913
  10,576
Interest expense (income), $m
  1
  16
  27
  41
  59
  81
  107
  138
  174
  215
  262
  313
  370
  432
  499
  572
  648
  730
  817
  908
  1,003
  1,103
  1,207
  1,316
  1,429
  1,547
  1,670
  1,797
  1,929
  2,067
  2,210
Earnings before tax, $m
  34
  99
  145
  202
  271
  354
  451
  563
  691
  835
  994
  1,206
  1,396
  1,601
  1,821
  2,056
  2,304
  2,567
  2,843
  3,132
  3,434
  3,750
  4,079
  4,421
  4,777
  5,148
  5,532
  5,932
  6,348
  6,780
  7,229
Tax expense, $m
  7
  27
  39
  54
  73
  96
  122
  152
  187
  225
  268
  326
  377
  432
  492
  555
  622
  693
  768
  846
  927
  1,012
  1,101
  1,194
  1,290
  1,390
  1,494
  1,602
  1,714
  1,830
  1,952
Net income, $m
  27
  72
  106
  147
  198
  258
  329
  411
  505
  609
  726
  880
  1,019
  1,169
  1,330
  1,501
  1,682
  1,874
  2,075
  2,286
  2,507
  2,737
  2,978
  3,228
  3,488
  3,758
  4,039
  4,331
  4,634
  4,949
  5,277

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  85
  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
  1,188
  1,555
  2,135
  2,863
  3,755
  4,827
  6,092
  7,559
  9,235
  11,123
  13,227
  15,544
  18,072
  20,808
  23,747
  26,885
  30,216
  33,737
  37,444
  41,333
  45,405
  49,656
  54,090
  58,707
  63,510
  68,504
  73,695
  79,089
  84,694
  90,520
  96,577
Adjusted assets (=assets-cash), $m
  1,103
  1,555
  2,135
  2,863
  3,755
  4,827
  6,092
  7,559
  9,235
  11,123
  13,227
  15,544
  18,072
  20,808
  23,747
  26,885
  30,216
  33,737
  37,444
  41,333
  45,405
  49,656
  54,090
  58,707
  63,510
  68,504
  73,695
  79,089
  84,694
  90,520
  96,577
Revenue / Adjusted assets
  0.589
  0.589
  0.589
  0.589
  0.589
  0.589
  0.589
  0.589
  0.589
  0.589
  0.589
  0.589
  0.589
  0.589
  0.589
  0.589
  0.589
  0.589
  0.589
  0.589
  0.589
  0.589
  0.589
  0.589
  0.589
  0.589
  0.589
  0.589
  0.589
  0.589
  0.589
Average production assets, $m
  234
  330
  453
  607
  796
  1,024
  1,292
  1,603
  1,958
  2,359
  2,805
  3,296
  3,832
  4,412
  5,035
  5,701
  6,407
  7,154
  7,940
  8,764
  9,628
  10,529
  11,469
  12,448
  13,467
  14,526
  15,626
  16,770
  17,959
  19,194
  20,478
Working capital, $m
  224
  210
  288
  386
  506
  651
  822
  1,020
  1,246
  1,500
  1,784
  2,097
  2,438
  2,807
  3,203
  3,626
  4,076
  4,550
  5,050
  5,575
  6,124
  6,698
  7,296
  7,918
  8,566
  9,240
  9,940
  10,668
  11,424
  12,209
  13,026
Total debt, $m
  465
  772
  1,179
  1,689
  2,314
  3,066
  3,952
  4,981
  6,155
  7,479
  8,954
  10,578
  12,350
  14,268
  16,329
  18,528
  20,863
  23,332
  25,930
  28,657
  31,511
  34,491
  37,599
  40,835
  44,202
  47,703
  51,342
  55,123
  59,053
  63,137
  67,382
Total liabilities, $m
  783
  1,090
  1,497
  2,007
  2,632
  3,384
  4,270
  5,299
  6,473
  7,797
  9,272
  10,896
  12,668
  14,586
  16,647
  18,846
  21,181
  23,650
  26,248
  28,975
  31,829
  34,809
  37,917
  41,153
  44,520
  48,021
  51,660
  55,441
  59,371
  63,455
  67,700
Total equity, $m
  405
  465
  638
  856
  1,123
  1,443
  1,821
  2,260
  2,761
  3,326
  3,955
  4,648
  5,403
  6,222
  7,100
  8,038
  9,035
  10,087
  11,196
  12,359
  13,576
  14,847
  16,173
  17,553
  18,989
  20,483
  22,035
  23,648
  25,324
  27,066
  28,877
Total liabilities and equity, $m
  1,188
  1,555
  2,135
  2,863
  3,755
  4,827
  6,091
  7,559
  9,234
  11,123
  13,227
  15,544
  18,071
  20,808
  23,747
  26,884
  30,216
  33,737
  37,444
  41,334
  45,405
  49,656
  54,090
  58,706
  63,509
  68,504
  73,695
  79,089
  84,695
  90,521
  96,577
Debt-to-equity ratio
  1.148
  1.660
  1.850
  1.970
  2.060
  2.120
  2.170
  2.200
  2.230
  2.250
  2.260
  2.280
  2.290
  2.290
  2.300
  2.300
  2.310
  2.310
  2.320
  2.320
  2.320
  2.320
  2.320
  2.330
  2.330
  2.330
  2.330
  2.330
  2.330
  2.330
  2.330
Adjusted equity ratio
  0.290
  0.299
  0.299
  0.299
  0.299
  0.299
  0.299
  0.299
  0.299
  0.299
  0.299
  0.299
  0.299
  0.299
  0.299
  0.299
  0.299
  0.299
  0.299
  0.299
  0.299
  0.299
  0.299
  0.299
  0.299
  0.299
  0.299
  0.299
  0.299
  0.299
  0.299

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  27
  72
  106
  147
  198
  258
  329
  411
  505
  609
  726
  880
  1,019
  1,169
  1,330
  1,501
  1,682
  1,874
  2,075
  2,286
  2,507
  2,737
  2,978
  3,228
  3,488
  3,758
  4,039
  4,331
  4,634
  4,949
  5,277
Depreciation, amort., depletion, $m
  24
  55
  62
  71
  81
  94
  109
  126
  146
  168
  193
  183
  213
  245
  280
  317
  356
  397
  441
  487
  535
  585
  637
  692
  748
  807
  868
  932
  998
  1,066
  1,138
Funds from operations, $m
  71
  128
  168
  218
  279
  352
  438
  537
  650
  777
  918
  1,063
  1,232
  1,414
  1,609
  1,818
  2,038
  2,271
  2,516
  2,773
  3,042
  3,322
  3,615
  3,919
  4,236
  4,565
  4,907
  5,262
  5,632
  6,015
  6,415
Change in working capital, $m
  3
  61
  78
  98
  120
  145
  171
  198
  226
  255
  284
  313
  341
  369
  396
  423
  449
  475
  500
  525
  549
  574
  598
  623
  648
  674
  700
  728
  756
  786
  817
Cash from operations, $m
  68
  67
  89
  120
  159
  207
  267
  339
  424
  523
  635
  751
  891
  1,045
  1,213
  1,394
  1,589
  1,796
  2,016
  2,249
  2,493
  2,749
  3,017
  3,296
  3,588
  3,891
  4,207
  4,535
  4,875
  5,230
  5,598
Maintenance CAPEX, $m
  0
  -13
  -18
  -25
  -34
  -44
  -57
  -72
  -89
  -109
  -131
  -156
  -183
  -213
  -245
  -280
  -317
  -356
  -397
  -441
  -487
  -535
  -585
  -637
  -692
  -748
  -807
  -868
  -932
  -998
  -1,066
New CAPEX, $m
  -21
  -96
  -123
  -154
  -189
  -227
  -268
  -311
  -355
  -401
  -446
  -491
  -536
  -580
  -623
  -665
  -706
  -747
  -786
  -825
  -863
  -902
  -940
  -979
  -1,018
  -1,059
  -1,101
  -1,144
  -1,189
  -1,235
  -1,284
Cash from investing activities, $m
  -600
  -109
  -141
  -179
  -223
  -271
  -325
  -383
  -444
  -510
  -577
  -647
  -719
  -793
  -868
  -945
  -1,023
  -1,103
  -1,183
  -1,266
  -1,350
  -1,437
  -1,525
  -1,616
  -1,710
  -1,807
  -1,908
  -2,012
  -2,121
  -2,233
  -2,350
Free cash flow, $m
  -532
  -42
  -52
  -60
  -64
  -64
  -58
  -43
  -20
  13
  58
  104
  172
  252
  345
  449
  566
  694
  833
  983
  1,143
  1,312
  1,492
  1,680
  1,878
  2,084
  2,299
  2,523
  2,755
  2,997
  3,247
Issuance/(repayment) of debt, $m
  464
  317
  407
  510
  626
  752
  887
  1,028
  1,175
  1,324
  1,474
  1,624
  1,772
  1,918
  2,060
  2,199
  2,335
  2,468
  2,598
  2,727
  2,854
  2,981
  3,108
  3,236
  3,367
  3,501
  3,639
  3,781
  3,929
  4,084
  4,246
Issuance/(repurchase) of shares, $m
  144
  63
  68
  70
  69
  62
  49
  27
  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  
  578
  380
  475
  580
  695
  814
  936
  1,055
  1,175
  1,324
  1,474
  1,624
  1,772
  1,918
  2,060
  2,199
  2,335
  2,468
  2,598
  2,727
  2,854
  2,981
  3,108
  3,236
  3,367
  3,501
  3,639
  3,781
  3,929
  4,084
  4,246
Total cash flow (excl. dividends), $m
  47
  338
  423
  521
  630
  750
  878
  1,012
  1,155
  1,337
  1,532
  1,728
  1,944
  2,170
  2,405
  2,649
  2,901
  3,162
  3,431
  3,709
  3,997
  4,293
  4,600
  4,917
  5,245
  5,585
  5,938
  6,304
  6,685
  7,081
  7,493
Retained Cash Flow (-), $m
  -147
  -135
  -173
  -218
  -267
  -321
  -378
  -439
  -501
  -565
  -629
  -693
  -756
  -818
  -879
  -938
  -996
  -1,053
  -1,108
  -1,163
  -1,217
  -1,271
  -1,326
  -1,380
  -1,436
  -1,493
  -1,552
  -1,613
  -1,676
  -1,742
  -1,811
Prev. year cash balance distribution, $m
 
  75
  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
 
  278
  249
  303
  363
  429
  500
  574
  654
  773
  903
  1,035
  1,188
  1,352
  1,526
  1,711
  1,905
  2,109
  2,323
  2,546
  2,779
  3,022
  3,274
  3,536
  3,809
  4,092
  4,386
  4,691
  5,009
  5,339
  5,682
Discount rate, %
 
  7.70
  8.09
  8.49
  8.91
  9.36
  9.83
  10.32
  10.83
  11.38
  11.95
  12.54
  13.17
  13.83
  14.52
  15.25
  16.01
  16.81
  17.65
  18.53
  19.46
  20.43
  21.45
  22.52
  23.65
  24.83
  26.07
  27.38
  28.75
  30.18
  31.69
PV of cash for distribution, $m
 
  258
  213
  237
  258
  274
  285
  288
  287
  293
  292
  282
  269
  251
  229
  204
  177
  150
  125
  101
  79
  61
  46
  33
  23
  16
  11
  7
  4
  3
  1
Current shareholders' claim on cash, %
  100
  91.9
  86.1
  81.9
  78.9
  76.9
  75.7
  75.2
  75.2
  75.2
  75.2
  75.2
  75.2
  75.2
  75.2
  75.2
  75.2
  75.2
  75.2
  75.2
  75.2
  75.2
  75.2
  75.2
  75.2
  75.2
  75.2
  75.2
  75.2
  75.2
  75.2

MTS Systems Corporation supplies test systems and position sensors in the Americas, Europe, and Asia. The company operates in two segments, Test and Sensors. The Test segment provides testing solutions, including road simulators for durability simulation; tire performance and rolling resistance measurement systems; moving road-plane systems and balances for aerodynamics measurements in wind tunnels; systems for the physical characterization of materials, such as ceramics, composites, and steel; and systems to test durability and performance of implants, prostheses, and other medical and dental materials and devices. This segment also offers products, systems, and software to perform static and fatigue testing of aircraft and space vehicles; systems for structural engineering, including high force static and dynamic testing; and seismic simulation tables to test the designs of structures and establish building codes. In addition, it provides installation, calibration, maintenance, training, and consulting services, as well as various accessories and spare parts. This segment serves automobile, truck, motorcycle, motorsports vehicle, construction equipment, agricultural equipment, rail, and off-road vehicle manufacturers and their suppliers, as well as power generation, aerospace, bio-medical, wind energy, oil and gas, structural engineering, and other industries. The Sensors segment manufactures products utilizing magnetostriction technology for manufacturers of plastic injection molding machines, steel mills, fluid power, oil and gas, medical, wood product processing equipment, mobile equipment, and energy industries. It also offers products to measure fluid displacement for customers in the process industries. The company sells its products through direct sales organization, and independent representatives and distributors, as well as through catalogs, Internet, etc. MTS Systems Corporation was founded in 1966 and is headquartered in Eden Prairie, Minnesota.

FINANCIAL RATIOS  of  MTS Systems (MTSC)

Valuation Ratios
P/E Ratio 32.8
Price to Sales 1.4
Price to Book 2.2
Price to Tangible Book
Price to Cash Flow 13
Price to Free Cash Flow 18.8
Growth Rates
Sales Growth Rate 15.2%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate 16.7%
Cap. Spend. - 3 Yr. Gr. Rate -6.9%
Financial Strength
Quick Ratio 9
Current Ratio 0
LT Debt to Equity 112.3%
Total Debt to Equity 114.8%
Interest Coverage 35
Management Effectiveness
Return On Assets 3.4%
Ret/ On Assets - 3 Yr. Avg. 7.4%
Return On Total Capital 4.7%
Ret/ On T. Cap. - 3 Yr. Avg. 11.2%
Return On Equity 8.1%
Return On Equity - 3 Yr. Avg. 14%
Asset Turnover 0.8
Profitability Ratios
Gross Margin 35.5%
Gross Margin - 3 Yr. Avg. 38.1%
EBITDA Margin 9.1%
EBITDA Margin - 3 Yr. Avg. 12.4%
Operating Margin 6.5%
Oper. Margin - 3 Yr. Avg. 9.4%
Pre-Tax Margin 5.2%
Pre-Tax Margin - 3 Yr. Avg. 8.7%
Net Profit Margin 4.2%
Net Profit Margin - 3 Yr. Avg. 6.5%
Effective Tax Rate 20.6%
Eff/ Tax Rate - 3 Yr. Avg. 24%
Payout Ratio 51.9%

MTSC stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the MTSC stock intrinsic value calculation we used $650 million for the last fiscal year's total revenue generated by MTS Systems. The default revenue input number comes from 2016 income statement of MTS 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 MTSC stock valuation model: a) initial revenue growth rate of 40.9% 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 7.7%, whose default value for MTSC is calculated based on our internal credit rating of MTS 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 MTS 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 MTSC stock the variable cost ratio is equal to 89.1%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $0 million in the base year in the intrinsic value calculation for MTSC 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 MTS Systems.

Corporate tax rate of 27% is the nominal tax rate for MTS 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 MTSC 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 MTSC are equal to 36%.

Life of production assets of 18 years is the average useful life of capital assets used in MTS 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 MTSC is equal to 22.9%. 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 - $405 million for MTS 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 16.421 million for MTS 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 MTS Systems at the current share price and the inputted number of shares is $0.9 billion.

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COMPANY NEWS

▶ ETFs with exposure to MTS Systems Corp. : July 24, 2017   [Jul-24-17 05:27PM  Capital Cube]
▶ ETFs with exposure to MTS Systems Corp. : July 14, 2017   [Jul-14-17 03:43PM  Capital Cube]
▶ MTS Announces Declaration of Quarterly Cash Dividend   [Jun-07-17 04:05PM  PR Newswire]
▶ ETFs with exposure to MTS Systems Corp. : May 25, 2017   [May-25-17 12:44PM  Capital Cube]
▶ MTS beats Street 2Q forecasts   [May-08-17 04:32PM  Associated Press]
▶ MTS Systems CEO Jeffrey Graves pay up $1M, new CFO announced   [Apr-25-17 12:40PM  American City Business Journals]
▶ MTS Systems Announces Chief Financial Officer Transition   [Apr-24-17 04:05PM  PR Newswire]
▶ Should You Get Rid of MTS Systems (MTSC) Now?   [Apr-18-17 08:38AM  Zacks]
▶ ETFs with exposure to MTS Systems Corp. : April 17, 2017   [Apr-17-17 01:00PM  Capital Cube]
▶ Stocks to Watch: RetailMeNot, United Continental, Hub Group   [09:44AM  The Wall Street Journal]
▶ MTS posts 1Q profit   [Apr-10-17 04:21PM  Associated Press]
▶ Mairs & Power Comments on MTS Systems   [Mar-16-17 01:55PM  GuruFocus.com]
▶ MTS Announces Declaration of Quarterly Cash Dividend   [Feb-06-17 04:30PM  PR Newswire]
▶ Should You Avoid MTS Systems Corporation (MTSC)?   [Dec-08-16 08:35AM  at Insider Monkey]
▶ MTS investigates China executives; delays Q4 report   [Nov-29-16 12:00PM  at bizjournals.com]
▶ MTS Announces Declaration of Quarterly Cash Dividend   [Nov-15-16 04:05PM  PR Newswire]
▶ MTS Systems to Present at InvestMNt 2016 Conference   [Aug-11-16 04:05PM  PR Newswire]
▶ MTS posts 3Q profit   [Aug-08-16 05:41PM  AP]
▶ MTS Announces Declaration of Quarterly Cash Dividend   [Jul-28-16 04:05PM  PR Newswire]
▶ MTS Systems to Present at J.P. Morgan Auto Conference   [Jul-27-16 04:05PM  PR Newswire]
Stock chart of MTSC Financial statements of MTSC Annual reports of MTSC
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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