Intrinsic value of Triumph Group - TGI

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$33.90

  Intrinsic Value

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  Rating & Target

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  Value-price divergence*

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Previous close

$33.90

 
Intrinsic value

$0.00

 
Up/down potential

-100%

 
Rating

str. sell

 
Value-price divergence* premium content

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

We calculate the intrinsic value of TGI 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 2017), $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 2.2

 

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, %
  -9.08
  2.00
  2.30
  2.57
  2.81
  3.03
  3.23
  3.41
  3.57
  3.71
  3.84
  3.95
  4.06
  4.15
  4.24
  4.31
  4.38
  4.44
  4.50
  4.55
  4.59
  4.64
  4.67
  4.70
  4.73
  4.76
  4.78
  4.81
  4.83
  4.84
  4.86
Revenue, $m
  3,533
  3,604
  3,687
  3,781
  3,888
  4,006
  4,135
  4,276
  4,428
  4,592
  4,769
  4,957
  5,158
  5,372
  5,600
  5,842
  6,098
  6,369
  6,655
  6,958
  7,278
  7,615
  7,971
  8,346
  8,741
  9,157
  9,595
  10,056
  10,542
  11,052
  11,589
Variable operating expenses, $m
 
  4,614
  4,717
  4,836
  4,969
  5,116
  5,277
  5,453
  5,643
  5,848
  6,069
  6,190
  6,441
  6,708
  6,993
  7,294
  7,614
  7,952
  8,310
  8,688
  9,087
  9,509
  9,953
  10,421
  10,914
  11,434
  11,981
  12,557
  13,163
  13,800
  14,471
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
  3,476
  4,614
  4,717
  4,836
  4,969
  5,116
  5,277
  5,453
  5,643
  5,848
  6,069
  6,190
  6,441
  6,708
  6,993
  7,294
  7,614
  7,952
  8,310
  8,688
  9,087
  9,509
  9,953
  10,421
  10,914
  11,434
  11,981
  12,557
  13,163
  13,800
  14,471
Operating income, $m
  57
  -1,010
  -1,031
  -1,055
  -1,081
  -1,110
  -1,142
  -1,177
  -1,215
  -1,256
  -1,300
  -1,233
  -1,283
  -1,336
  -1,392
  -1,453
  -1,516
  -1,584
  -1,655
  -1,730
  -1,810
  -1,893
  -1,982
  -2,075
  -2,173
  -2,277
  -2,386
  -2,501
  -2,621
  -2,748
  -2,882
EBITDA, $m
  235
  -814
  -833
  -854
  -878
  -905
  -934
  -966
  -1,000
  -1,038
  -1,077
  -1,120
  -1,165
  -1,214
  -1,265
  -1,320
  -1,378
  -1,439
  -1,504
  -1,572
  -1,644
  -1,721
  -1,801
  -1,886
  -1,975
  -2,069
  -2,168
  -2,272
  -2,382
  -2,497
  -2,618
Interest expense (income), $m
  62
  53
  56
  60
  64
  69
  75
  81
  87
  95
  102
  110
  119
  129
  138
  149
  160
  172
  185
  198
  212
  227
  243
  259
  277
  295
  315
  335
  356
  379
  403
Earnings before tax, $m
  -24
  -1,063
  -1,087
  -1,115
  -1,145
  -1,180
  -1,217
  -1,258
  -1,303
  -1,351
  -1,402
  -1,343
  -1,402
  -1,464
  -1,531
  -1,602
  -1,677
  -1,756
  -1,840
  -1,928
  -2,022
  -2,121
  -2,225
  -2,335
  -2,450
  -2,572
  -2,700
  -2,836
  -2,978
  -3,127
  -3,284
Tax expense, $m
  19
  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
Net income, $m
  -43
  -1,063
  -1,087
  -1,115
  -1,145
  -1,180
  -1,217
  -1,258
  -1,303
  -1,351
  -1,402
  -1,343
  -1,402
  -1,464
  -1,531
  -1,602
  -1,677
  -1,756
  -1,840
  -1,928
  -2,022
  -2,121
  -2,225
  -2,335
  -2,450
  -2,572
  -2,700
  -2,836
  -2,978
  -3,127
  -3,284

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  70
  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
  4,415
  4,433
  4,534
  4,651
  4,782
  4,927
  5,086
  5,259
  5,447
  5,649
  5,865
  6,097
  6,345
  6,608
  6,888
  7,185
  7,500
  7,834
  8,186
  8,559
  8,952
  9,367
  9,804
  10,266
  10,752
  11,263
  11,802
  12,370
  12,966
  13,594
  14,255
Adjusted assets (=assets-cash), $m
  4,345
  4,433
  4,534
  4,651
  4,782
  4,927
  5,086
  5,259
  5,447
  5,649
  5,865
  6,097
  6,345
  6,608
  6,888
  7,185
  7,500
  7,834
  8,186
  8,559
  8,952
  9,367
  9,804
  10,266
  10,752
  11,263
  11,802
  12,370
  12,966
  13,594
  14,255
Revenue / Adjusted assets
  0.813
  0.813
  0.813
  0.813
  0.813
  0.813
  0.813
  0.813
  0.813
  0.813
  0.813
  0.813
  0.813
  0.813
  0.813
  0.813
  0.813
  0.813
  0.813
  0.813
  0.813
  0.813
  0.813
  0.813
  0.813
  0.813
  0.813
  0.813
  0.813
  0.813
  0.813
Average production assets, $m
  1,066
  1,088
  1,113
  1,142
  1,174
  1,210
  1,249
  1,291
  1,337
  1,387
  1,440
  1,497
  1,558
  1,622
  1,691
  1,764
  1,842
  1,923
  2,010
  2,101
  2,198
  2,300
  2,407
  2,520
  2,640
  2,765
  2,898
  3,037
  3,184
  3,338
  3,500
Working capital, $m
  439
  541
  553
  567
  583
  601
  620
  641
  664
  689
  715
  744
  774
  806
  840
  876
  915
  955
  998
  1,044
  1,092
  1,142
  1,196
  1,252
  1,311
  1,374
  1,439
  1,508
  1,581
  1,658
  1,738
Total debt, $m
  1,196
  1,195
  1,277
  1,371
  1,476
  1,593
  1,721
  1,861
  2,012
  2,174
  2,349
  2,535
  2,735
  2,947
  3,172
  3,411
  3,665
  3,933
  4,217
  4,517
  4,833
  5,167
  5,519
  5,891
  6,282
  6,694
  7,128
  7,584
  8,065
  8,570
  9,102
Total liabilities, $m
  3,568
  3,568
  3,650
  3,744
  3,849
  3,966
  4,094
  4,234
  4,385
  4,547
  4,722
  4,908
  5,108
  5,320
  5,545
  5,784
  6,038
  6,306
  6,590
  6,890
  7,206
  7,540
  7,892
  8,264
  8,655
  9,067
  9,501
  9,957
  10,438
  10,943
  11,475
Total equity, $m
  846
  864
  884
  907
  932
  961
  992
  1,026
  1,062
  1,101
  1,144
  1,189
  1,237
  1,289
  1,343
  1,401
  1,463
  1,528
  1,596
  1,669
  1,746
  1,827
  1,912
  2,002
  2,097
  2,196
  2,301
  2,412
  2,528
  2,651
  2,780
Total liabilities and equity, $m
  4,414
  4,432
  4,534
  4,651
  4,781
  4,927
  5,086
  5,260
  5,447
  5,648
  5,866
  6,097
  6,345
  6,609
  6,888
  7,185
  7,501
  7,834
  8,186
  8,559
  8,952
  9,367
  9,804
  10,266
  10,752
  11,263
  11,802
  12,369
  12,966
  13,594
  14,255
Debt-to-equity ratio
  1.414
  1.380
  1.440
  1.510
  1.580
  1.660
  1.740
  1.810
  1.890
  1.970
  2.050
  2.130
  2.210
  2.290
  2.360
  2.430
  2.510
  2.570
  2.640
  2.710
  2.770
  2.830
  2.890
  2.940
  3.000
  3.050
  3.100
  3.140
  3.190
  3.230
  3.270
Adjusted equity ratio
  0.179
  0.195
  0.195
  0.195
  0.195
  0.195
  0.195
  0.195
  0.195
  0.195
  0.195
  0.195
  0.195
  0.195
  0.195
  0.195
  0.195
  0.195
  0.195
  0.195
  0.195
  0.195
  0.195
  0.195
  0.195
  0.195
  0.195
  0.195
  0.195
  0.195
  0.195

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  -43
  -1,063
  -1,087
  -1,115
  -1,145
  -1,180
  -1,217
  -1,258
  -1,303
  -1,351
  -1,402
  -1,343
  -1,402
  -1,464
  -1,531
  -1,602
  -1,677
  -1,756
  -1,840
  -1,928
  -2,022
  -2,121
  -2,225
  -2,335
  -2,450
  -2,572
  -2,700
  -2,836
  -2,978
  -3,127
  -3,284
Depreciation, amort., depletion, $m
  178
  196
  198
  200
  203
  205
  208
  211
  215
  219
  223
  113
  117
  122
  127
  133
  138
  145
  151
  158
  165
  173
  181
  190
  198
  208
  218
  228
  239
  251
  263
Funds from operations, $m
  407
  -867
  -889
  -914
  -943
  -974
  -1,009
  -1,047
  -1,088
  -1,132
  -1,180
  -1,230
  -1,285
  -1,342
  -1,404
  -1,469
  -1,538
  -1,611
  -1,689
  -1,770
  -1,857
  -1,948
  -2,044
  -2,145
  -2,252
  -2,364
  -2,483
  -2,607
  -2,738
  -2,876
  -3,021
Change in working capital, $m
  323
  11
  12
  14
  16
  18
  19
  21
  23
  25
  26
  28
  30
  32
  34
  36
  38
  41
  43
  45
  48
  51
  53
  56
  59
  62
  66
  69
  73
  77
  81
Cash from operations, $m
  84
  -1,351
  -902
  -929
  -959
  -992
  -1,029
  -1,068
  -1,111
  -1,157
  -1,206
  -1,259
  -1,315
  -1,375
  -1,438
  -1,505
  -1,576
  -1,652
  -1,732
  -1,816
  -1,905
  -1,998
  -2,097
  -2,201
  -2,311
  -2,427
  -2,548
  -2,676
  -2,811
  -2,953
  -3,102
Maintenance CAPEX, $m
  0
  -80
  -82
  -84
  -86
  -88
  -91
  -94
  -97
  -101
  -104
  -108
  -113
  -117
  -122
  -127
  -133
  -138
  -145
  -151
  -158
  -165
  -173
  -181
  -190
  -198
  -208
  -218
  -228
  -239
  -251
New CAPEX, $m
  -80
  -23
  -25
  -29
  -32
  -36
  -39
  -43
  -46
  -50
  -53
  -57
  -61
  -65
  -69
  -73
  -77
  -82
  -87
  -91
  -97
  -102
  -107
  -113
  -119
  -126
  -132
  -139
  -147
  -154
  -162
Cash from investing activities, $m
  -128
  -103
  -107
  -113
  -118
  -124
  -130
  -137
  -143
  -151
  -157
  -165
  -174
  -182
  -191
  -200
  -210
  -220
  -232
  -242
  -255
  -267
  -280
  -294
  -309
  -324
  -340
  -357
  -375
  -393
  -413
Free cash flow, $m
  -44
  -1,454
  -1,008
  -1,041
  -1,077
  -1,116
  -1,159
  -1,204
  -1,254
  -1,307
  -1,364
  -1,424
  -1,488
  -1,556
  -1,629
  -1,705
  -1,786
  -1,872
  -1,963
  -2,058
  -2,159
  -2,265
  -2,378
  -2,496
  -2,620
  -2,751
  -2,889
  -3,033
  -3,186
  -3,346
  -3,515
Issuance/(repayment) of debt, $m
  41
  69
  82
  94
  105
  117
  128
  139
  151
  163
  175
  187
  199
  212
  225
  239
  253
  268
  284
  300
  317
  334
  352
  371
  391
  412
  434
  457
  481
  506
  532
Issuance/(repurchase) of shares, $m
  0
  1,403
  946
  970
  997
  1,028
  1,061
  1,099
  1,140
  1,184
  1,231
  1,282
  1,337
  1,396
  1,458
  1,524
  1,594
  1,669
  1,748
  1,831
  1,919
  2,012
  2,111
  2,214
  2,323
  2,439
  2,560
  2,687
  2,822
  2,963
  3,112
Cash from financing (excl. dividends), $m  
  40
  1,472
  1,028
  1,064
  1,102
  1,145
  1,189
  1,238
  1,291
  1,347
  1,406
  1,469
  1,536
  1,608
  1,683
  1,763
  1,847
  1,937
  2,032
  2,131
  2,236
  2,346
  2,463
  2,585
  2,714
  2,851
  2,994
  3,144
  3,303
  3,469
  3,644
Total cash flow (excl. dividends), $m
  -4
  -1,385
  -926
  -947
  -971
  -999
  -1,030
  -1,065
  -1,103
  -1,144
  -1,189
  -1,237
  -1,289
  -1,344
  -1,403
  -1,466
  -1,533
  -1,604
  -1,679
  -1,758
  -1,843
  -1,931
  -2,025
  -2,124
  -2,229
  -2,339
  -2,455
  -2,577
  -2,705
  -2,841
  -2,983
Retained Cash Flow (-), $m
  89
  -18
  -20
  -23
  -26
  -28
  -31
  -34
  -37
  -39
  -42
  -45
  -48
  -51
  -55
  -58
  -61
  -65
  -69
  -73
  -77
  -81
  -85
  -90
  -95
  -100
  -105
  -111
  -116
  -122
  -129
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
 
  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
Discount rate, %
 
  10.40
  10.92
  11.47
  12.04
  12.64
  13.27
  13.94
  14.63
  15.37
  16.13
  16.94
  17.79
  18.68
  19.61
  20.59
  21.62
  22.70
  23.84
  25.03
  26.28
  27.59
  28.97
  30.42
  31.94
  33.54
  35.22
  36.98
  38.83
  40.77
  42.81
PV of cash for 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
Current shareholders' claim on cash, %
  100
  60.9
  42.8
  30.1
  21.1
  14.8
  10.4
  7.3
  5.1
  3.6
  2.5
  1.7
  1.2
  0.8
  0.6
  0.4
  0.3
  0.2
  0.1
  0.1
  0.1
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0

Triumph Group, Inc. designs, engineers, manufactures, repairs, overhauls, and distributes aero structures, aircraft components, accessories, subassemblies, and systems worldwide. Its Aerostructures Group segment designs, manufactures, builds, and repairs acoustic and thermal insulation systems, aircraft wings, composite and metal bonding, composite ducts and floor panels, empennages, engine nacelles, flight control surfaces, helicopter cabins, precision machined parts, stretch-formed leading edges and fuselage skins, and wing spars and stringers. The company’s Aerospace Systems Group segment designs, engineers, builds, and repairs aircraft and engine mounted accessory drives, cargo hooks, cockpit control levers, control system valve bodies, electronic engine controls, exhaust nozzles and ducting, geared transmissions and drive train components, fuel metering units, thermal control systems and components, high lift actuations, hydraulic systems and components, landing gear actuation systems, landing gear components and assemblies, main engine gear box assemblies, main fuel pumps, secondary flight control systems, and vibration absorbers. Its Aftermarket Services Group segment provides maintenance, repair, and overhaul (MRO) services for aircraft components and accessories manufactured by third parties; and supplies spare parts for commercial and military aviation industry. This segment also designs, engineers, manufactures, repairs, and overhauls aftermarket aerospace gas turbine engine components; and offers MRO solutions, leasing packages, exchange programs, and parts and services to airline, air cargo, and third-party overhaul facilities. The company serves the aviation industry, including original equipment manufacturers of commercial, regional, business, and military aircraft and aircraft components, as well as commercial and regional airlines and air cargo carriers. Triumph Group, Inc. was founded in 1993 and is headquartered in Berwyn, Pennsylvania.

FINANCIAL RATIOS  of  Triumph Group (TGI)

Valuation Ratios
P/E Ratio -39.1
Price to Sales 0.5
Price to Book 2
Price to Tangible Book
Price to Cash Flow 20
Price to Free Cash Flow 420.1
Growth Rates
Sales Growth Rate -9.1%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate -27.3%
Cap. Spend. - 3 Yr. Gr. Rate -8.8%
Financial Strength
Quick Ratio 0
Current Ratio 0
LT Debt to Equity 122.3%
Total Debt to Equity 141.4%
Interest Coverage 1
Management Effectiveness
Return On Assets 1.5%
Ret/ On Assets - 3 Yr. Avg. -3.8%
Return On Total Capital -2%
Ret/ On T. Cap. - 3 Yr. Avg. -10.4%
Return On Equity -4.8%
Return On Equity - 3 Yr. Avg. -20.8%
Asset Turnover 0.8
Profitability Ratios
Gross Margin 0%
Gross Margin - 3 Yr. Avg. 9.2%
EBITDA Margin 6.1%
EBITDA Margin - 3 Yr. Avg. -0.8%
Operating Margin 1.6%
Oper. Margin - 3 Yr. Avg. -5.1%
Pre-Tax Margin -0.7%
Pre-Tax Margin - 3 Yr. Avg. -7.2%
Net Profit Margin -1.2%
Net Profit Margin - 3 Yr. Avg. -7.3%
Effective Tax Rate -79.2%
Eff/ Tax Rate - 3 Yr. Avg. -12.7%
Payout Ratio -18.6%

TGI stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the TGI stock intrinsic value calculation we used $3533 million for the last fiscal year's total revenue generated by Triumph Group. The default revenue input number comes from 2017 income statement of Triumph Group. 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 TGI stock valuation model: a) initial revenue growth rate of 2% 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 10.4%, whose default value for TGI is calculated based on our internal credit rating of Triumph Group, 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 Triumph Group.
    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 TGI stock the variable cost ratio is equal to 128.1%.

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 TGI 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 4.7% for Triumph Group.

Corporate tax rate of 27% is the nominal tax rate for Triumph Group. 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 TGI 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 TGI are equal to 30.2%.

Life of production assets of 13.3 years is the average useful life of capital assets used in Triumph Group 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 TGI is equal to 15%. 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 - $846 million for Triumph Group - 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 64.602 million for Triumph Group 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 Triumph Group at the current share price and the inputted number of shares is $2.2 billion.


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COMPANY NEWS

▶ Triumph Group Stock Upgraded: What You Need to Know   [May-25-17 11:46AM  Motley Fool]
▶ Intuit and Triumph jump while Lowe's and Tiffany tumble   [May-24-17 04:49PM  Associated Press]
▶ Why Triumph Group Stock Is Soaring 28%   [02:29PM  Motley Fool]
▶ Triumph Group settles on disputed wing work with Bombardier   [02:20PM  American City Business Journals]
▶ Story Stocks from Briefing.com   [11:11AM  Briefing.com]
▶ Triumph Group reports 4Q loss   [06:22AM  Associated Press]
▶ Triumph and Boeing Sign MOA on Expanded Partnership   [May-22-17 12:47PM  Business Wire]
▶ The Shorts Are Getting Squeezed Hard in Triumph Group   [May-16-17 04:09PM  TheStreet.com]
▶ Why Triumph Group Stock Soared 14% Today   [12:25PM  Motley Fool]
▶ [$$] Triumph Group's Aerostructures Division Braces for Bankruptcy   [May-11-17 03:34PM  The Wall Street Journal]
▶ Triumph Group Declares Quarterly Dividend   [Apr-28-17 12:31PM  Business Wire]
▶ Triumph Group Declares Quarterly Dividend   [Feb-14-17 05:46PM  Business Wire]
▶ Triumph talking with Boeing about potential early end to 747   [Feb-07-17 12:05PM  at bizjournals.com]
▶ Triumph Appoints New Business Development Lead   [Feb-01-17 05:29PM  Business Wire]
▶ Is Omnicell, Inc. (OMCL) a Good Stock to Buy?   [Dec-20-16 02:51PM  at Insider Monkey]
▶ [$$] Gores Buying Three Businesses From Triumph Group   [12:08PM  at The Wall Street Journal]
▶ Triumph Group Inc (TGI): Should It Be Part of Your Portfolio?   [Dec-04-16 05:56PM  at Insider Monkey]
▶ Why Triumph Group Stock Soared 14% in November   [Dec-02-16 01:49PM  at Motley Fool]
▶ Triumph Group Declares Quarterly Dividend   [Nov-21-16 03:39PM  Business Wire]
▶ [$$] Boeing Reverses Course On 747 Work   [Oct-19-16 12:47PM  at The Wall Street Journal]
Stock chart of TGI Financial statements of TGI Annual reports of TGI
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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