Intrinsic value of UQM Technologies - UQM

Previous Close

$1.14

  Intrinsic Value

$0.05

stock screener

  Rating & Target

str. sell

-96%

  Value-price divergence*

-115%

Previous close

$1.14

 
Intrinsic value

$0.05

 
Up/down potential

-96%

 
Rating

str. sell

 
Value-price divergence*

-115%

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

We calculate the intrinsic value of UQM 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 0.1

 

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, %
  -20.00
  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
  4
  6
  10
  15
  21
  30
  42
  56
  73
  94
  119
  148
  181
  218
  260
  305
  355
  409
  467
  529
  595
  664
  737
  814
  894
  978
  1,066
  1,157
  1,252
  1,350
  1,453
Variable operating expenses, $m
 
  16
  25
  37
  54
  76
  104
  140
  183
  236
  298
  370
  452
  545
  649
  763
  888
  1,022
  1,167
  1,322
  1,486
  1,660
  1,843
  2,035
  2,236
  2,446
  2,664
  2,892
  3,130
  3,376
  3,632
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
  17
  16
  25
  37
  54
  76
  104
  140
  183
  236
  298
  370
  452
  545
  649
  763
  888
  1,022
  1,167
  1,322
  1,486
  1,660
  1,843
  2,035
  2,236
  2,446
  2,664
  2,892
  3,130
  3,376
  3,632
Operating income, $m
  -13
  -10
  -15
  -22
  -32
  -45
  -62
  -84
  -110
  -142
  -179
  -222
  -271
  -327
  -389
  -458
  -533
  -613
  -700
  -793
  -892
  -996
  -1,106
  -1,221
  -1,341
  -1,467
  -1,599
  -1,735
  -1,878
  -2,026
  -2,179
EBITDA, $m
  -13
  -9
  -13
  -20
  -29
  -41
  -57
  -76
  -100
  -129
  -162
  -202
  -247
  -297
  -354
  -416
  -484
  -557
  -636
  -720
  -810
  -905
  -1,004
  -1,109
  -1,218
  -1,333
  -1,452
  -1,576
  -1,706
  -1,840
  -1,980
Interest expense (income), $m
  0
  0
  0
  0
  0
  0
  0
  1
  1
  1
  2
  2
  3
  3
  4
  4
  5
  6
  7
  8
  9
  10
  12
  13
  14
  16
  17
  19
  20
  22
  24
Earnings before tax, $m
  -13
  -10
  -15
  -22
  -32
  -46
  -63
  -84
  -111
  -143
  -180
  -224
  -274
  -330
  -393
  -462
  -538
  -620
  -707
  -801
  -901
  -1,006
  -1,117
  -1,234
  -1,356
  -1,483
  -1,616
  -1,754
  -1,898
  -2,047
  -2,203
Tax expense, $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
  0
Net income, $m
  -13
  -10
  -15
  -22
  -32
  -46
  -63
  -84
  -111
  -143
  -180
  -224
  -274
  -330
  -393
  -462
  -538
  -620
  -707
  -801
  -901
  -1,006
  -1,117
  -1,234
  -1,356
  -1,483
  -1,616
  -1,754
  -1,898
  -2,047
  -2,203

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  2
  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
  14
  22
  33
  48
  68
  94
  126
  165
  213
  268
  333
  408
  491
  585
  687
  800
  921
  1,052
  1,191
  1,339
  1,495
  1,660
  1,833
  2,014
  2,203
  2,400
  2,606
  2,819
  3,042
  3,272
Adjusted assets (=assets-cash), $m
  9
  14
  22
  33
  48
  68
  94
  126
  165
  213
  268
  333
  408
  491
  585
  687
  800
  921
  1,052
  1,191
  1,339
  1,495
  1,660
  1,833
  2,014
  2,203
  2,400
  2,606
  2,819
  3,042
  3,272
Revenue / Adjusted assets
  0.444
  0.429
  0.455
  0.455
  0.438
  0.441
  0.447
  0.444
  0.442
  0.441
  0.444
  0.444
  0.444
  0.444
  0.444
  0.444
  0.444
  0.444
  0.444
  0.444
  0.444
  0.444
  0.444
  0.444
  0.444
  0.444
  0.444
  0.444
  0.444
  0.444
  0.444
Average production assets, $m
  6
  9
  14
  20
  30
  42
  57
  77
  101
  130
  164
  204
  249
  300
  357
  420
  488
  562
  642
  727
  817
  913
  1,014
  1,119
  1,230
  1,345
  1,465
  1,591
  1,721
  1,857
  1,998
Working capital, $m
  3
  2
  2
  4
  5
  8
  10
  14
  18
  24
  30
  37
  45
  55
  65
  76
  89
  102
  117
  132
  149
  166
  184
  203
  224
  245
  266
  289
  313
  338
  363
Total debt, $m
  0
  1
  3
  5
  9
  13
  19
  26
  35
  45
  58
  72
  88
  107
  128
  151
  176
  202
  231
  262
  295
  330
  367
  405
  445
  487
  531
  576
  624
  673
  724
Total liabilities, $m
  2
  3
  5
  7
  11
  15
  21
  28
  37
  47
  60
  74
  90
  109
  130
  153
  178
  204
  233
  264
  297
  332
  369
  407
  447
  489
  533
  578
  626
  675
  726
Total equity, $m
  9
  11
  17
  26
  38
  53
  73
  98
  129
  165
  209
  259
  317
  382
  455
  535
  622
  717
  818
  927
  1,042
  1,163
  1,292
  1,426
  1,567
  1,714
  1,868
  2,027
  2,193
  2,366
  2,546
Total liabilities and equity, $m
  11
  14
  22
  33
  49
  68
  94
  126
  166
  212
  269
  333
  407
  491
  585
  688
  800
  921
  1,051
  1,191
  1,339
  1,495
  1,661
  1,833
  2,014
  2,203
  2,401
  2,605
  2,819
  3,041
  3,272
Debt-to-equity ratio
  0.000
  0.110
  0.170
  0.210
  0.230
  0.250
  0.260
  0.260
  0.270
  0.270
  0.280
  0.280
  0.280
  0.280
  0.280
  0.280
  0.280
  0.280
  0.280
  0.280
  0.280
  0.280
  0.280
  0.280
  0.280
  0.280
  0.280
  0.280
  0.280
  0.280
  0.280
Adjusted equity ratio
  0.778
  0.778
  0.778
  0.778
  0.778
  0.778
  0.778
  0.778
  0.778
  0.778
  0.778
  0.778
  0.778
  0.778
  0.778
  0.778
  0.778
  0.778
  0.778
  0.778
  0.778
  0.778
  0.778
  0.778
  0.778
  0.778
  0.778
  0.778
  0.778
  0.778
  0.778

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  -13
  -10
  -15
  -22
  -32
  -46
  -63
  -84
  -111
  -143
  -180
  -224
  -274
  -330
  -393
  -462
  -538
  -620
  -707
  -801
  -901
  -1,006
  -1,117
  -1,234
  -1,356
  -1,483
  -1,616
  -1,754
  -1,898
  -2,047
  -2,203
Depreciation, amort., depletion, $m
  0
  1
  1
  2
  3
  4
  6
  8
  10
  13
  16
  20
  25
  30
  36
  42
  49
  56
  64
  73
  82
  91
  101
  112
  123
  135
  147
  159
  172
  186
  200
Funds from operations, $m
  -5
  -9
  -14
  -20
  -29
  -42
  -57
  -77
  -101
  -130
  -164
  -204
  -249
  -300
  -357
  -420
  -489
  -563
  -643
  -729
  -819
  -915
  -1,016
  -1,122
  -1,233
  -1,348
  -1,469
  -1,595
  -1,726
  -1,862
  -2,003
Change in working capital, $m
  0
  1
  1
  1
  2
  2
  3
  4
  4
  5
  6
  7
  8
  9
  10
  11
  12
  13
  14
  15
  16
  17
  18
  19
  20
  21
  22
  23
  24
  25
  26
Cash from operations, $m
  -5
  -9
  -14
  -21
  -31
  -44
  -60
  -80
  -105
  -135
  -170
  -211
  -257
  -310
  -368
  -432
  -501
  -577
  -658
  -744
  -836
  -932
  -1,034
  -1,141
  -1,253
  -1,369
  -1,491
  -1,618
  -1,749
  -1,886
  -2,029
Maintenance CAPEX, $m
  0
  -1
  -1
  -1
  -2
  -3
  -4
  -6
  -8
  -10
  -13
  -16
  -20
  -25
  -30
  -36
  -42
  -49
  -56
  -64
  -73
  -82
  -91
  -101
  -112
  -123
  -135
  -147
  -159
  -172
  -186
New CAPEX, $m
  0
  -3
  -5
  -7
  -9
  -12
  -16
  -20
  -24
  -29
  -34
  -40
  -45
  -51
  -57
  -63
  -69
  -74
  -80
  -85
  -90
  -96
  -101
  -106
  -111
  -115
  -120
  -125
  -130
  -136
  -141
Cash from investing activities, $m
  0
  -4
  -6
  -8
  -11
  -15
  -20
  -26
  -32
  -39
  -47
  -56
  -65
  -76
  -87
  -99
  -111
  -123
  -136
  -149
  -163
  -178
  -192
  -207
  -223
  -238
  -255
  -272
  -289
  -308
  -327
Free cash flow, $m
  -5
  -13
  -20
  -30
  -42
  -59
  -80
  -106
  -137
  -174
  -217
  -267
  -323
  -386
  -455
  -530
  -612
  -700
  -794
  -893
  -999
  -1,110
  -1,226
  -1,348
  -1,475
  -1,608
  -1,746
  -1,890
  -2,039
  -2,194
  -2,355
Issuance/(repayment) of debt, $m
  0
  1
  2
  2
  3
  4
  6
  7
  9
  11
  12
  14
  16
  19
  21
  23
  25
  27
  29
  31
  33
  35
  37
  38
  40
  42
  44
  46
  47
  49
  51
Issuance/(repurchase) of shares, $m
  0
  14
  21
  31
  44
  61
  83
  109
  142
  180
  224
  275
  332
  395
  466
  542
  625
  714
  809
  910
  1,016
  1,128
  1,245
  1,368
  1,496
  1,630
  1,769
  1,914
  2,064
  2,220
  2,383
Cash from financing (excl. dividends), $m  
  0
  15
  23
  33
  47
  65
  89
  116
  151
  191
  236
  289
  348
  414
  487
  565
  650
  741
  838
  941
  1,049
  1,163
  1,282
  1,406
  1,536
  1,672
  1,813
  1,960
  2,111
  2,269
  2,434
Total cash flow (excl. dividends), $m
  -5
  2
  3
  4
  5
  7
  9
  11
  13
  16
  19
  22
  25
  28
  32
  35
  38
  41
  44
  47
  50
  53
  56
  59
  61
  64
  67
  70
  73
  75
  78
Retained Cash Flow (-), $m
  13
  -14
  -21
  -31
  -44
  -61
  -83
  -109
  -142
  -180
  -224
  -275
  -332
  -395
  -466
  -542
  -625
  -714
  -809
  -910
  -1,016
  -1,128
  -1,245
  -1,368
  -1,496
  -1,630
  -1,769
  -1,914
  -2,064
  -2,220
  -2,383
Prev. year cash balance distribution, $m
 
  2
  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
 
  -10
  -18
  -27
  -39
  -54
  -74
  -99
  -128
  -164
  -205
  -253
  -307
  -367
  -434
  -507
  -587
  -673
  -765
  -862
  -966
  -1,075
  -1,190
  -1,310
  -1,435
  -1,566
  -1,702
  -1,844
  -1,992
  -2,145
  -2,304
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
 
  -10
  -17
  -24
  -32
  -42
  -54
  -67
  -80
  -94
  -107
  -120
  -131
  -140
  -146
  -149
  -149
  -146
  -141
  -133
  -123
  -111
  -99
  -86
  -73
  -61
  -50
  -40
  -31
  -23
  -17
Current shareholders' claim on cash, %
  100
  75.7
  58.1
  45.1
  35.3
  27.9
  22.3
  17.9
  14.5
  11.8
  9.7
  8.0
  6.6
  5.5
  4.6
  3.9
  3.2
  2.7
  2.3
  2.0
  1.7
  1.4
  1.2
  1.0
  0.9
  0.8
  0.6
  0.6
  0.5
  0.4
  0.3

UQM Technologies, Inc., (UQM) develops, manufactures and sells electric motors, generators, power electronic controllers and fuel cell compressors for the commercial truck, bus, automotive, marine, military and industrial markets. The Company's focus is incorporating its technology as propulsion systems for electric, hybrid electric, plug-in hybrid electric and fuel cell electric vehicles, delivering the heart of the electric vehicle. UQM's principal products include propulsion motors and generators with power ratings from 50 kilowatts to 250 kilowatts, auxiliary motors and electronic controls and direct current (DC)-to-DC converters. The Company has developed two basic frame size propulsion systems: the PowerPhase Pro for passenger car, light commercial applications, light duty marine and other lighter duty applications, and the PowerPhase HD lineup of products for heavier commercial bus and truck applications and heavier duty marine and other applications.

FINANCIAL RATIOS  of  UQM Technologies (UQM)

Valuation Ratios
P/E Ratio -4.3
Price to Sales 13.8
Price to Book 6.1
Price to Tangible Book
Price to Cash Flow -11.1
Price to Free Cash Flow -11.1
Growth Rates
Sales Growth Rate -20%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate NaN%
Cap. Spend. - 3 Yr. Gr. Rate NaN%
Financial Strength
Quick Ratio NaN
Current Ratio 0
LT Debt to Equity 0%
Total Debt to Equity 0%
Interest Coverage 0
Management Effectiveness
Return On Assets -76.5%
Ret/ On Assets - 3 Yr. Avg. -42.5%
Return On Total Capital -83.9%
Ret/ On T. Cap. - 3 Yr. Avg. -46.6%
Return On Equity -83.9%
Return On Equity - 3 Yr. Avg. -46.6%
Asset Turnover 0.2
Profitability Ratios
Gross Margin -150%
Gross Margin - 3 Yr. Avg. -35%
EBITDA Margin -325%
EBITDA Margin - 3 Yr. Avg. -190%
Operating Margin -325%
Oper. Margin - 3 Yr. Avg. -213.3%
Pre-Tax Margin -325%
Pre-Tax Margin - 3 Yr. Avg. -205%
Net Profit Margin -325%
Net Profit Margin - 3 Yr. Avg. -205%
Effective Tax Rate 0%
Eff/ Tax Rate - 3 Yr. Avg. 0%
Payout Ratio 0%

UQM stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the UQM stock intrinsic value calculation we used $4 million for the last fiscal year's total revenue generated by UQM Technologies. The default revenue input number comes from 2016 income statement of UQM Technologies. 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 UQM 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 4.3%, whose default value for UQM is calculated based on our internal credit rating of UQM Technologies, 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 UQM Technologies.
    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 UQM stock the variable cost ratio is equal to 250%.

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 UQM 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 UQM Technologies.

Corporate tax rate of 27% is the nominal tax rate for UQM Technologies. 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 UQM 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 UQM are equal to 137.5%.

Life of production assets of 10 years is the average useful life of capital assets used in UQM Technologies 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 UQM is equal to 25%. 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 - $9 million for UQM Technologies - 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 48.643 million for UQM Technologies 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 UQM Technologies at the current share price and the inputted number of shares is $0.1 billion.

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COMPANY NEWS

▶ UQM Technologies Reports Second Quarter Results   [Aug-07-17 04:02PM  Business Wire]
▶ UQM Technologies Reports First Quarter Results   [May-11-17 04:05PM  Business Wire]
▶ UQM Technologies Reports Shareholder Meeting Actions   [Nov-22-16 12:21PM  Business Wire]
▶ UQM Technologies to Ship Initial Systems to ITL in China   [Nov-24  07:30AM  Business Wire]
Financial statements of UQM
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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