Intrinsic value of Wabtec - WAB

Previous Close

$82.80

  Intrinsic Value

$672.27

stock screener

  Rating & Target

str. buy

+712%

Previous close

$82.80

 
Intrinsic value

$672.27

 
Up/down potential

+712%

 
Rating

str. buy

We calculate the intrinsic value of WAB 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, %
  -11.40
  41.70
  38.03
  34.73
  31.75
  29.08
  26.67
  24.50
  22.55
  20.80
  19.22
  17.80
  16.52
  15.37
  14.33
  13.40
  12.56
  11.80
  11.12
  10.51
  9.96
  9.46
  9.02
  8.61
  8.25
  7.93
  7.63
  7.37
  7.13
  6.92
  6.73
Revenue, $m
  2,931
  4,153
  5,733
  7,723
  10,176
  13,135
  16,638
  20,715
  25,387
  30,668
  36,561
  43,068
  50,182
  57,892
  66,187
  75,053
  84,477
  94,446
  104,949
  115,978
  127,526
  139,593
  152,178
  165,286
  178,927
  193,111
  207,855
  223,176
  239,098
  255,645
  272,846
Variable operating expenses, $m
 
  2,414
  3,252
  4,310
  5,612
  7,184
  9,044
  11,209
  13,690
  16,494
  19,625
  22,872
  26,650
  30,745
  35,150
  39,859
  44,863
  50,157
  55,735
  61,592
  67,725
  74,133
  80,817
  87,778
  95,023
  102,555
  110,385
  118,522
  126,977
  135,765
  144,900
Fixed operating expenses, $m
 
  744
  763
  782
  801
  821
  842
  863
  885
  907
  929
  953
  976
  1,001
  1,026
  1,051
  1,078
  1,105
  1,132
  1,161
  1,190
  1,219
  1,250
  1,281
  1,313
  1,346
  1,380
  1,414
  1,449
  1,486
  1,523
Total operating expenses, $m
  2,473
  3,158
  4,015
  5,092
  6,413
  8,005
  9,886
  12,072
  14,575
  17,401
  20,554
  23,825
  27,626
  31,746
  36,176
  40,910
  45,941
  51,262
  56,867
  62,753
  68,915
  75,352
  82,067
  89,059
  96,336
  103,901
  111,765
  119,936
  128,426
  137,251
  146,423
Operating income, $m
  458
  996
  1,718
  2,632
  3,763
  5,130
  6,752
  8,643
  10,813
  13,266
  16,008
  19,243
  22,555
  26,147
  30,011
  34,143
  38,536
  43,184
  48,082
  53,225
  58,611
  64,240
  70,111
  76,227
  82,591
  89,210
  96,090
  103,240
  110,671
  118,394
  126,423
EBITDA, $m
  528
  1,259
  2,003
  2,944
  4,108
  5,515
  7,184
  9,130
  11,362
  13,887
  16,708
  19,823
  23,231
  26,926
  30,903
  35,154
  39,674
  44,456
  49,495
  54,787
  60,329
  66,120
  72,160
  78,453
  85,001
  91,811
  98,889
  106,246
  113,891
  121,837
  130,098
Interest expense (income), $m
  30
  62
  124
  204
  305
  429
  579
  757
  964
  1,201
  1,469
  1,768
  2,098
  2,459
  2,850
  3,271
  3,720
  4,198
  4,704
  5,237
  5,796
  6,382
  6,994
  7,633
  8,298
  8,990
  9,709
  10,457
  11,234
  12,042
  12,881
Earnings before tax, $m
  413
  934
  1,594
  2,428
  3,458
  4,701
  6,173
  7,886
  9,849
  12,065
  14,539
  17,476
  20,457
  23,688
  27,162
  30,873
  34,816
  38,986
  43,377
  47,988
  52,815
  57,858
  63,117
  68,594
  74,294
  80,220
  86,381
  92,783
  99,437
  106,352
  113,542
Tax expense, $m
  100
  252
  430
  656
  934
  1,269
  1,667
  2,129
  2,659
  3,258
  3,925
  4,718
  5,524
  6,396
  7,334
  8,336
  9,400
  10,526
  11,712
  12,957
  14,260
  15,622
  17,042
  18,520
  20,059
  21,659
  23,323
  25,051
  26,848
  28,715
  30,656
Net income, $m
  305
  682
  1,163
  1,773
  2,524
  3,432
  4,506
  5,757
  7,189
  8,808
  10,613
  12,757
  14,934
  17,292
  19,828
  22,537
  25,416
  28,459
  31,666
  35,031
  38,555
  42,236
  46,075
  50,074
  54,234
  58,561
  63,058
  67,732
  72,589
  77,637
  82,886

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  398
  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
  6,581
  8,762
  12,094
  16,294
  21,468
  27,711
  35,102
  43,703
  53,560
  64,700
  77,134
  90,861
  105,868
  122,135
  139,635
  158,341
  178,222
  199,253
  221,411
  244,678
  269,043
  294,499
  321,050
  348,706
  377,483
  407,408
  438,512
  470,836
  504,426
  539,336
  575,625
Adjusted assets (=assets-cash), $m
  6,183
  8,762
  12,094
  16,294
  21,468
  27,711
  35,102
  43,703
  53,560
  64,700
  77,134
  90,861
  105,868
  122,135
  139,635
  158,341
  178,222
  199,253
  221,411
  244,678
  269,043
  294,499
  321,050
  348,706
  377,483
  407,408
  438,512
  470,836
  504,426
  539,336
  575,625
Revenue / Adjusted assets
  0.474
  0.474
  0.474
  0.474
  0.474
  0.474
  0.474
  0.474
  0.474
  0.474
  0.474
  0.474
  0.474
  0.474
  0.474
  0.474
  0.474
  0.474
  0.474
  0.474
  0.474
  0.474
  0.474
  0.474
  0.474
  0.474
  0.474
  0.474
  0.474
  0.474
  0.474
Average production assets, $m
  1,183
  1,678
  2,316
  3,120
  4,111
  5,307
  6,722
  8,369
  10,257
  12,390
  14,771
  17,399
  20,273
  23,388
  26,740
  30,322
  34,129
  38,156
  42,399
  46,855
  51,521
  56,395
  61,480
  66,776
  72,287
  78,017
  83,973
  90,163
  96,596
  103,281
  110,230
Working capital, $m
  1,421
  1,632
  2,253
  3,035
  3,999
  5,162
  6,539
  8,141
  9,977
  12,052
  14,369
  16,926
  19,721
  22,752
  26,012
  29,496
  33,200
  37,117
  41,245
  45,579
  50,118
  54,860
  59,806
  64,958
  70,318
  75,893
  81,687
  87,708
  93,965
  100,469
  107,229
Total debt, $m
  1,893
  3,538
  5,827
  8,712
  12,267
  16,556
  21,633
  27,542
  34,314
  41,967
  50,509
  59,939
  70,249
  81,425
  93,447
  106,298
  119,957
  134,405
  149,628
  165,612
  182,350
  199,839
  218,079
  237,079
  256,849
  277,407
  298,776
  320,982
  344,059
  368,042
  392,973
Total liabilities, $m
  4,375
  6,020
  8,309
  11,194
  14,749
  19,038
  24,115
  30,024
  36,796
  44,449
  52,991
  62,421
  72,731
  83,907
  95,929
  108,780
  122,439
  136,887
  152,110
  168,094
  184,832
  202,321
  220,561
  239,561
  259,331
  279,889
  301,258
  323,464
  346,541
  370,524
  395,455
Total equity, $m
  2,206
  2,743
  3,786
  5,100
  6,720
  8,674
  10,987
  13,679
  16,764
  20,251
  24,143
  28,439
  33,137
  38,228
  43,706
  49,561
  55,784
  62,366
  69,302
  76,584
  84,210
  92,178
  100,489
  109,145
  118,152
  127,519
  137,254
  147,372
  157,885
  168,812
  180,171
Total liabilities and equity, $m
  6,581
  8,763
  12,095
  16,294
  21,469
  27,712
  35,102
  43,703
  53,560
  64,700
  77,134
  90,860
  105,868
  122,135
  139,635
  158,341
  178,223
  199,253
  221,412
  244,678
  269,042
  294,499
  321,050
  348,706
  377,483
  407,408
  438,512
  470,836
  504,426
  539,336
  575,626
Debt-to-equity ratio
  0.858
  1.290
  1.540
  1.710
  1.830
  1.910
  1.970
  2.010
  2.050
  2.070
  2.090
  2.110
  2.120
  2.130
  2.140
  2.140
  2.150
  2.160
  2.160
  2.160
  2.170
  2.170
  2.170
  2.170
  2.170
  2.180
  2.180
  2.180
  2.180
  2.180
  2.180
Adjusted equity ratio
  0.292
  0.313
  0.313
  0.313
  0.313
  0.313
  0.313
  0.313
  0.313
  0.313
  0.313
  0.313
  0.313
  0.313
  0.313
  0.313
  0.313
  0.313
  0.313
  0.313
  0.313
  0.313
  0.313
  0.313
  0.313
  0.313
  0.313
  0.313
  0.313
  0.313
  0.313

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  305
  682
  1,163
  1,773
  2,524
  3,432
  4,506
  5,757
  7,189
  8,808
  10,613
  12,757
  14,934
  17,292
  19,828
  22,537
  25,416
  28,459
  31,666
  35,031
  38,555
  42,236
  46,075
  50,074
  54,234
  58,561
  63,058
  67,732
  72,589
  77,637
  82,886
Depreciation, amort., depletion, $m
  70
  264
  285
  312
  345
  385
  432
  487
  550
  621
  700
  580
  676
  780
  891
  1,011
  1,138
  1,272
  1,413
  1,562
  1,717
  1,880
  2,049
  2,226
  2,410
  2,601
  2,799
  3,005
  3,220
  3,443
  3,674
Funds from operations, $m
  506
  946
  1,449
  2,084
  2,869
  3,816
  4,938
  6,244
  7,739
  9,429
  11,314
  13,337
  15,610
  18,072
  20,719
  23,548
  26,553
  29,731
  33,079
  36,593
  40,272
  44,116
  48,125
  52,300
  56,644
  61,161
  65,857
  70,737
  75,809
  81,080
  86,560
Change in working capital, $m
  57
  480
  621
  782
  964
  1,163
  1,377
  1,602
  1,836
  2,075
  2,316
  2,557
  2,796
  3,030
  3,260
  3,484
  3,704
  3,918
  4,128
  4,334
  4,539
  4,742
  4,946
  5,152
  5,361
  5,574
  5,794
  6,021
  6,257
  6,503
  6,760
Cash from operations, $m
  449
  465
  828
  1,302
  1,905
  2,653
  3,561
  4,641
  5,903
  7,354
  8,997
  10,780
  12,814
  15,042
  17,459
  20,063
  22,850
  25,814
  28,951
  32,259
  35,734
  39,374
  43,179
  47,148
  51,283
  55,587
  60,063
  64,716
  69,551
  74,577
  79,800
Maintenance CAPEX, $m
  0
  -39
  -56
  -77
  -104
  -137
  -177
  -224
  -279
  -342
  -413
  -492
  -580
  -676
  -780
  -891
  -1,011
  -1,138
  -1,272
  -1,413
  -1,562
  -1,717
  -1,880
  -2,049
  -2,226
  -2,410
  -2,601
  -2,799
  -3,005
  -3,220
  -3,443
New CAPEX, $m
  -50
  -495
  -638
  -804
  -991
  -1,195
  -1,415
  -1,647
  -1,888
  -2,133
  -2,381
  -2,629
  -2,874
  -3,115
  -3,351
  -3,582
  -3,807
  -4,027
  -4,243
  -4,456
  -4,666
  -4,875
  -5,084
  -5,296
  -5,511
  -5,730
  -5,956
  -6,190
  -6,432
  -6,685
  -6,949
Cash from investing activities, $m
  -775
  -534
  -694
  -881
  -1,095
  -1,332
  -1,592
  -1,871
  -2,167
  -2,475
  -2,794
  -3,121
  -3,454
  -3,791
  -4,131
  -4,473
  -4,818
  -5,165
  -5,515
  -5,869
  -6,228
  -6,592
  -6,964
  -7,345
  -7,737
  -8,140
  -8,557
  -8,989
  -9,437
  -9,905
  -10,392
Free cash flow, $m
  -326
  -69
  134
  421
  810
  1,321
  1,969
  2,770
  3,737
  4,879
  6,203
  7,659
  9,360
  11,251
  13,328
  15,590
  18,032
  20,649
  23,436
  26,390
  29,506
  32,782
  36,214
  39,803
  43,546
  47,447
  51,506
  55,727
  60,114
  64,672
  69,408
Issuance/(repayment) of debt, $m
  772
  1,775
  2,289
  2,885
  3,555
  4,289
  5,078
  5,909
  6,772
  7,653
  8,542
  9,431
  10,310
  11,175
  12,023
  12,851
  13,659
  14,448
  15,223
  15,984
  16,738
  17,489
  18,241
  18,999
  19,770
  20,558
  21,369
  22,206
  23,076
  23,983
  24,931
Issuance/(repurchase) of shares, $m
  -210
  123
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash from financing (excl. dividends), $m  
  556
  1,898
  2,289
  2,885
  3,555
  4,289
  5,078
  5,909
  6,772
  7,653
  8,542
  9,431
  10,310
  11,175
  12,023
  12,851
  13,659
  14,448
  15,223
  15,984
  16,738
  17,489
  18,241
  18,999
  19,770
  20,558
  21,369
  22,206
  23,076
  23,983
  24,931
Total cash flow (excl. dividends), $m
  204
  1,828
  2,423
  3,306
  4,365
  5,610
  7,047
  8,679
  10,508
  12,531
  14,745
  17,090
  19,670
  22,426
  25,351
  28,441
  31,690
  35,097
  38,659
  42,374
  46,244
  50,270
  54,455
  58,802
  63,317
  68,005
  72,875
  77,933
  83,190
  88,655
  94,339
Retained Cash Flow (-), $m
  -506
  -805
  -1,043
  -1,315
  -1,620
  -1,954
  -2,313
  -2,692
  -3,085
  -3,487
  -3,892
  -4,297
  -4,697
  -5,092
  -5,478
  -5,855
  -6,223
  -6,583
  -6,935
  -7,283
  -7,626
  -7,968
  -8,310
  -8,656
  -9,007
  -9,366
  -9,736
  -10,117
  -10,514
  -10,927
  -11,359
Prev. year cash balance distribution, $m
 
  268
  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
 
  1,292
  1,380
  1,991
  2,745
  3,656
  4,733
  5,987
  7,423
  9,045
  10,854
  12,793
  14,973
  17,335
  19,874
  22,586
  25,467
  28,514
  31,723
  35,092
  38,618
  42,302
  46,144
  50,146
  54,309
  58,639
  63,139
  67,816
  72,676
  77,728
  82,980
Discount rate, %
 
  6.50
  6.83
  7.17
  7.52
  7.90
  8.30
  8.71
  9.15
  9.60
  10.08
  10.59
  11.12
  11.67
  12.26
  12.87
  13.51
  14.19
  14.90
  15.64
  16.43
  17.25
  18.11
  19.01
  19.96
  20.96
  22.01
  23.11
  24.27
  25.48
  26.75
PV of cash for distribution, $m
 
  1,213
  1,209
  1,618
  2,054
  2,500
  2,934
  3,337
  3,686
  3,963
  4,153
  4,229
  4,226
  4,126
  3,938
  3,674
  3,352
  2,989
  2,605
  2,218
  1,844
  1,497
  1,186
  915
  688
  503
  358
  247
  166
  108
  68
Current shareholders' claim on cash, %
  100
  98.3
  98.3
  98.3
  98.3
  98.3
  98.3
  98.3
  98.3
  98.3
  98.3
  98.3
  98.3
  98.3
  98.3
  98.3
  98.3
  98.3
  98.3
  98.3
  98.3
  98.3
  98.3
  98.3
  98.3
  98.3
  98.3
  98.3
  98.3
  98.3
  98.3

Westinghouse Air Brake Technologies Corporation (Wabtec), doing business as Wabtec Corporation, is a provider of technology-based equipment and services for the global freight and transit rail industries. The Company's segments include the Freight Segment and the Transit Segment. The Freight Segment primarily manufactures and services components for new and existing freight cars and locomotives, builds new switcher locomotives, rebuilds freight locomotives, supplies railway electronics, positive train control equipment, signal design and engineering services, and provides related heat exchange and cooling systems. The Transit Segment primarily manufactures and services components for new and existing passenger transit vehicles, typically regional trains, high speed trains, subway cars, light-rail vehicles and buses, builds new commuter locomotives, refurbishes subway cars, provides heating, ventilation, and air conditioning equipment, and doors for buses and subways.

FINANCIAL RATIOS  of  Wabtec (WAB)

Valuation Ratios
P/E Ratio 25.9
Price to Sales 2.7
Price to Book 3.6
Price to Tangible Book
Price to Cash Flow 17.6
Price to Free Cash Flow 19.8
Growth Rates
Sales Growth Rate -11.4%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate 2%
Cap. Spend. - 3 Yr. Gr. Rate 4%
Financial Strength
Quick Ratio 3
Current Ratio 0.6
LT Debt to Equity 79.9%
Total Debt to Equity 85.8%
Interest Coverage 15
Management Effectiveness
Return On Assets 6.7%
Ret/ On Assets - 3 Yr. Avg. 10.3%
Return On Total Capital 9.4%
Ret/ On T. Cap. - 3 Yr. Avg. 14.1%
Return On Equity 15.6%
Return On Equity - 3 Yr. Avg. 19.7%
Asset Turnover 0.6
Profitability Ratios
Gross Margin 31.5%
Gross Margin - 3 Yr. Avg. 31.3%
EBITDA Margin 17.5%
EBITDA Margin - 3 Yr. Avg. 18.8%
Operating Margin 15.6%
Oper. Margin - 3 Yr. Avg. 17.1%
Pre-Tax Margin 14.1%
Pre-Tax Margin - 3 Yr. Avg. 16.2%
Net Profit Margin 10.4%
Net Profit Margin - 3 Yr. Avg. 11.3%
Effective Tax Rate 24.2%
Eff/ Tax Rate - 3 Yr. Avg. 28.9%
Payout Ratio 10.5%

WAB stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the WAB stock intrinsic value calculation we used $2931 million for the last fiscal year's total revenue generated by Wabtec. The default revenue input number comes from 2016 income statement of Wabtec. 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 WAB stock valuation model: a) initial revenue growth rate of 41.7% 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 6.5%, whose default value for WAB is calculated based on our internal credit rating of Wabtec, 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 Wabtec.
    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 WAB stock the variable cost ratio is equal to 60.2%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $726 million in the base year in the intrinsic value calculation for WAB 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 Wabtec.

Corporate tax rate of 27% is the nominal tax rate for Wabtec. 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 WAB 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 WAB are equal to 40.4%.

Life of production assets of 37.9 years is the average useful life of capital assets used in Wabtec 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 WAB is equal to 39.3%. 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 - $2206 million for Wabtec - 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 96.033 million for Wabtec 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 Wabtec at the current share price and the inputted number of shares is $8.0 billion.

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COMPANY NEWS

▶ New Strong Sell Stocks for December 15th   [Dec-15-17 08:29AM  Zacks]
▶ IIROC Trading Halt - WAB   [Nov-27-17 09:30AM  PR Newswire]
▶ IIROC Trading Halt - WAB   [09:30AM  CNW Group]
▶ Wabtec Declares Regular Quarterly Dividend   [Oct-31-17 10:50AM  GlobeNewswire]
▶ Wabtec beats Street 3Q forecasts   [08:53AM  Associated Press]
▶ Wabtec Announces Earnings Release Date   [Oct-11-17 09:46AM  GlobeNewswire]
▶ New Strong Sell Stocks for July 28th   [Jul-28-17 09:01AM  Zacks]
▶ Wabtec misses Street 2Q forecasts   [Jul-25-17 10:28PM  Associated Press]
▶ Wabtec Announces Earnings Release Date   [Jul-14-17 06:45AM  GlobeNewswire]
▶ FTC Expected To Block Rite Aid-Walgreens Deal: Report   [Jun-09-17 01:13PM  Investor's Business Daily]
▶ Wabtec beats 1Q profit forecasts   [07:30AM  Associated Press]
▶ Rite Aid To Report Q4 As Walgreens Merger Doubts Plague Stock   [Apr-24-17 04:19PM  Investor's Business Daily]
▶ Timeline: Westinghouse Electric Co.   [Mar-29-17 04:45PM  at bizjournals.com]
▶ Timeline: Westinghouse Electric Co.   [04:45PM  American City Business Journals]
▶ State Owned Enterprises Take More Energy Business   [Mar-18-17 10:00AM  Oilprice.com]
Financial statements of WAB
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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