Intrinsic value of Axcelis Technologies, Inc. - ACLS

Previous Close

$21.67

  Intrinsic Value

$18.70

stock screener

  Rating & Target

hold

-14%

Previous close

$21.67

 
Intrinsic value

$18.70

 
Up/down potential

-14%

 
Rating

hold

We calculate the intrinsic value of ACLS 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 0001), $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 0.7

 

FINANCIAL STATEMENTS FORECAST and PRESENT VALUE CALCULATION

Fiscal year
   2
   3
   4
   5
   6
   7
   8
   9
   10
   11
   12
   13
   14
   15
   16
   17
   18
   19
   20
   21
   22
   23
   24
   25
   26
   27
   28
   29
   30
   31

INCOME STATEMENT

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue growth rate, %
  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
  452
  462
  474
  487
  502
  518
  536
  555
  576
  598
  622
  647
  674
  702
  732
  765
  799
  835
  872
  913
  955
  999
  1,046
  1,096
  1,148
  1,203
  1,261
  1,322
  1,386
  1,453
Variable operating expenses, $m
  277
  284
  291
  299
  308
  318
  328
  340
  352
  366
  376
  391
  407
  425
  443
  462
  483
  505
  528
  552
  577
  604
  633
  663
  694
  728
  763
  799
  838
  879
Fixed operating expenses, $m
  115
  118
  121
  123
  126
  129
  132
  134
  137
  140
  144
  147
  150
  153
  157
  160
  164
  167
  171
  175
  178
  182
  186
  191
  195
  199
  203
  208
  212
  217
Total operating expenses, $m
  392
  402
  412
  422
  434
  447
  460
  474
  489
  506
  520
  538
  557
  578
  600
  622
  647
  672
  699
  727
  755
  786
  819
  854
  889
  927
  966
  1,007
  1,050
  1,096
Operating income, $m
  59
  61
  63
  65
  68
  72
  76
  81
  86
  92
  102
  109
  116
  124
  133
  142
  152
  163
  174
  186
  199
  213
  227
  243
  259
  277
  295
  315
  335
  357
EBITDA, $m
  69
  71
  73
  76
  79
  83
  87
  92
  98
  104
  110
  117
  125
  133
  142
  152
  162
  173
  185
  198
  211
  226
  241
  257
  274
  292
  311
  332
  353
  376
Interest expense (income), $m
  5
  5
  5
  6
  6
  7
  7
  8
  8
  9
  10
  10
  11
  12
  13
  14
  15
  16
  17
  18
  20
  21
  22
  24
  26
  27
  29
  31
  33
  35
  37
Earnings before tax, $m
  54
  55
  57
  59
  62
  65
  69
  73
  77
  82
  92
  98
  104
  111
  119
  127
  136
  145
  156
  166
  178
  190
  203
  217
  232
  248
  264
  282
  300
  320
Tax expense, $m
  15
  15
  15
  16
  17
  18
  19
  20
  21
  22
  25
  26
  28
  30
  32
  34
  37
  39
  42
  45
  48
  51
  55
  59
  63
  67
  71
  76
  81
  86
Net income, $m
  39
  40
  42
  43
  45
  47
  50
  53
  56
  60
  67
  71
  76
  81
  87
  93
  99
  106
  114
  121
  130
  139
  148
  159
  169
  181
  193
  206
  219
  234

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $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 assets, $m
  464
  475
  487
  501
  516
  533
  551
  571
  592
  615
  639
  665
  692
  722
  753
  786
  821
  858
  897
  938
  981
  1,027
  1,076
  1,126
  1,180
  1,237
  1,296
  1,358
  1,424
  1,493
Adjusted assets (=assets-cash), $m
  464
  475
  487
  501
  516
  533
  551
  571
  592
  615
  639
  665
  692
  722
  753
  786
  821
  858
  897
  938
  981
  1,027
  1,076
  1,126
  1,180
  1,237
  1,296
  1,358
  1,424
  1,493
Revenue / Adjusted assets
  0.974
  0.973
  0.973
  0.972
  0.973
  0.972
  0.973
  0.972
  0.973
  0.972
  0.973
  0.973
  0.974
  0.972
  0.972
  0.973
  0.973
  0.973
  0.972
  0.973
  0.973
  0.973
  0.972
  0.973
  0.973
  0.973
  0.973
  0.973
  0.973
  0.973
Average production assets, $m
  39
  40
  41
  42
  44
  45
  47
  48
  50
  52
  54
  56
  59
  61
  64
  67
  69
  73
  76
  79
  83
  87
  91
  95
  100
  105
  110
  115
  121
  126
Working capital, $m
  136
  140
  143
  147
  152
  157
  162
  168
  174
  181
  188
  195
  203
  212
  221
  231
  241
  252
  263
  276
  288
  302
  316
  331
  347
  363
  381
  399
  419
  439
Total debt, $m
  51
  54
  58
  62
  67
  72
  77
  83
  90
  97
  104
  112
  121
  130
  140
  150
  160
  172
  184
  197
  210
  224
  239
  255
  271
  289
  307
  326
  346
  368
Total liabilities, $m
  143
  146
  150
  154
  159
  164
  170
  176
  182
  189
  197
  205
  213
  222
  232
  242
  253
  264
  276
  289
  302
  316
  331
  347
  363
  381
  399
  418
  439
  460
Total equity, $m
  321
  329
  337
  347
  357
  369
  381
  395
  410
  425
  442
  460
  479
  499
  521
  544
  568
  593
  621
  649
  679
  711
  744
  779
  817
  856
  897
  940
  986
  1,033
Total liabilities and equity, $m
  464
  475
  487
  501
  516
  533
  551
  571
  592
  614
  639
  665
  692
  721
  753
  786
  821
  857
  897
  938
  981
  1,027
  1,075
  1,126
  1,180
  1,237
  1,296
  1,358
  1,425
  1,493
Debt-to-equity ratio
  0.160
  0.160
  0.170
  0.180
  0.190
  0.190
  0.200
  0.210
  0.220
  0.230
  0.240
  0.240
  0.250
  0.260
  0.270
  0.280
  0.280
  0.290
  0.300
  0.300
  0.310
  0.320
  0.320
  0.330
  0.330
  0.340
  0.340
  0.350
  0.350
  0.360
Adjusted equity ratio
  0.692
  0.692
  0.692
  0.692
  0.692
  0.692
  0.692
  0.692
  0.692
  0.692
  0.692
  0.692
  0.692
  0.692
  0.692
  0.692
  0.692
  0.692
  0.692
  0.692
  0.692
  0.692
  0.692
  0.692
  0.692
  0.692
  0.692
  0.692
  0.692
  0.692

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  39
  40
  42
  43
  45
  47
  50
  53
  56
  60
  67
  71
  76
  81
  87
  93
  99
  106
  114
  121
  130
  139
  148
  159
  169
  181
  193
  206
  219
  234
Depreciation, amort., depletion, $m
  10
  10
  10
  10
  11
  11
  11
  11
  12
  12
  8
  8
  9
  9
  10
  10
  10
  11
  11
  12
  12
  13
  14
  14
  15
  16
  16
  17
  18
  19
Funds from operations, $m
  49
  50
  52
  54
  56
  58
  61
  64
  68
  72
  75
  80
  85
  90
  96
  103
  110
  117
  125
  133
  142
  152
  162
  173
  184
  196
  209
  223
  237
  253
Change in working capital, $m
  3
  3
  4
  4
  4
  5
  5
  6
  6
  7
  7
  8
  8
  9
  9
  10
  10
  11
  11
  12
  13
  13
  14
  15
  16
  17
  17
  18
  19
  20
Cash from operations, $m
  47
  47
  48
  50
  51
  53
  56
  59
  62
  65
  68
  72
  77
  82
  87
  93
  99
  106
  113
  121
  130
  138
  148
  158
  168
  180
  192
  205
  218
  232
Maintenance CAPEX, $m
  -6
  -6
  -6
  -6
  -6
  -7
  -7
  -7
  -7
  -7
  -8
  -8
  -8
  -9
  -9
  -10
  -10
  -10
  -11
  -11
  -12
  -12
  -13
  -14
  -14
  -15
  -16
  -16
  -17
  -18
New CAPEX, $m
  -1
  -1
  -1
  -1
  -1
  -1
  -2
  -2
  -2
  -2
  -2
  -2
  -2
  -2
  -3
  -3
  -3
  -3
  -3
  -3
  -4
  -4
  -4
  -4
  -5
  -5
  -5
  -5
  -6
  -6
Cash from investing activities, $m
  -7
  -7
  -7
  -7
  -7
  -8
  -9
  -9
  -9
  -9
  -10
  -10
  -10
  -11
  -12
  -13
  -13
  -13
  -14
  -14
  -16
  -16
  -17
  -18
  -19
  -20
  -21
  -21
  -23
  -24
Free cash flow, $m
  40
  40
  41
  42
  44
  45
  47
  50
  53
  56
  58
  62
  66
  71
  75
  81
  87
  93
  99
  106
  114
  122
  131
  140
  150
  160
  171
  183
  195
  208
Issuance/(repayment) of debt, $m
  3
  3
  4
  4
  5
  5
  6
  6
  7
  7
  7
  8
  9
  9
  10
  10
  11
  11
  12
  13
  13
  14
  15
  16
  17
  17
  18
  19
  20
  21
Issuance/(repurchase) of shares, $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 from financing (excl. dividends), $m  
  3
  3
  4
  4
  5
  5
  6
  6
  7
  7
  7
  8
  9
  9
  10
  10
  11
  11
  12
  13
  13
  14
  15
  16
  17
  17
  18
  19
  20
  21
Total cash flow (excl. dividends), $m
  43
  44
  45
  46
  48
  51
  53
  56
  59
  63
  66
  70
  75
  80
  85
  91
  97
  104
  111
  119
  127
  136
  146
  156
  166
  177
  189
  202
  216
  230
Retained Cash Flow (-), $m
  -6
  -7
  -8
  -9
  -11
  -12
  -13
  -14
  -15
  -16
  -17
  -18
  -19
  -20
  -22
  -23
  -24
  -26
  -27
  -29
  -30
  -32
  -33
  -35
  -37
  -39
  -41
  -43
  -46
  -48
Prev. year cash balance distribution, $m
  93
  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
  130
  36
  36
  37
  38
  39
  41
  42
  45
  47
  49
  52
  55
  59
  64
  68
  73
  79
  84
  91
  97
  104
  112
  120
  129
  138
  148
  159
  170
  182
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
  125
  33
  32
  30
  29
  28
  27
  26
  26
  25
  23
  22
  21
  20
  19
  17
  16
  14
  13
  12
  10
  9
  7
  6
  5
  4
  3
  2
  2
  1
Current shareholders' claim on cash, %
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0

Axcelis Technologies, Inc. designs, manufactures and services ion implantation and other processing equipment used in the fabrication of semiconductor chips. The Company also provides aftermarket lifecycle products and services, including used tools, spare parts, equipment upgrades, maintenance services and customer training. The Company offers a complete line of high energy, high current and medium current implanters for all application requirements. The Company's Purion XE high energy system combines its radio frequency (RF) Linac high energy, spot beam technology with the Purion platform. The Company also offers the Purion M medium current system. The Company's Purion M systems also offer differentiation for specialty applications, such as hot silicon carbide. The Company's Purion H high current system is extendable into ultra-low energy applications to satisfy future process requirements, including leakage current performance.

FINANCIAL RATIOS  of  Axcelis Technologies, Inc. (ACLS)

Valuation Ratios
P/E Ratio 58.2
Price to Sales 2.4
Price to Book 3.2
Price to Tangible Book
Price to Cash Flow -71.1
Price to Free Cash Flow -53.3
Growth Rates
Sales Growth Rate -11.6%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate 50%
Cap. Spend. - 3 Yr. Gr. Rate 24.6%
Financial Strength
Quick Ratio NaN
Current Ratio 0
LT Debt to Equity 23.9%
Total Debt to Equity 23.9%
Interest Coverage 3
Management Effectiveness
Return On Assets 5.5%
Ret/ On Assets - 3 Yr. Avg. 2.9%
Return On Total Capital 4.6%
Ret/ On T. Cap. - 3 Yr. Avg. 2%
Return On Equity 5.7%
Return On Equity - 3 Yr. Avg. 2.6%
Asset Turnover 0.9
Profitability Ratios
Gross Margin 37.5%
Gross Margin - 3 Yr. Avg. 35.2%
EBITDA Margin 7.5%
EBITDA Margin - 3 Yr. Avg. 4.5%
Operating Margin 6.4%
Oper. Margin - 3 Yr. Avg. 2.6%
Pre-Tax Margin 4.1%
Pre-Tax Margin - 3 Yr. Avg. 1.4%
Net Profit Margin 4.1%
Net Profit Margin - 3 Yr. Avg. 1.2%
Effective Tax Rate 0%
Eff/ Tax Rate - 3 Yr. Avg. -3.3%
Payout Ratio 0%

ACLS stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the ACLS stock intrinsic value calculation we used $443 million for the last fiscal year's total revenue generated by Axcelis Technologies, Inc.. The default revenue input number comes from 0001 income statement of Axcelis Technologies, Inc.. You may change it if you feel that it should be adjusted for some unusual circumstances that are not expected to be repeated in the future or if you already know (from interim financial statements, for example) that this year's revenue is going to be quite different.

Revenue growth rate. Forecasted future revenue growth rate is the most important input parameter for the intrinsic value calculation. Unlike other input parameters that are reasonably expected to be in line with their historic averages or their historic trends, the revenue growth rate by and large is a wild card: nobody really knows what the company's revenue will be in the future. Of course, the level of unpredictability is different for different industries (utility companies being the most predictable and, thus, less risky).
    We use three input parameters to forecast the revenue growth rate in our ACLS 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 4.3%, whose default value for ACLS is calculated based on our internal credit rating of Axcelis Technologies, Inc., is applied to the cash flow expected to be received a year from now (well, actually, to be precise, in the financial year following the base year - the last year for which we have financial statements). For each consecutive year the discount rate is multiplied by the discount rate multiplier of 1.05, e.i. each year it increases by 5%. Feel free to change this number to correspond to your level of risk assessment of Axcelis Technologies, Inc..
    By the way, it is easy to set the discount rate to be constant (this would make comparison with other valuation models easier): just set the discount rate multiplier equal to 1 and chose the magnitude of the initial discount rate to your liking.

Variable cost ratio is the ratio of variable costs (i.e. costs that fluctuate with fluctuation of the volume of production) to the revenue expressed as a percentage. In the calculation of intrinsic value of ACLS stock the variable cost ratio is equal to 61.4%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $113 million in the base year in the intrinsic value calculation for ACLS 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 10.7% for Axcelis Technologies, Inc..

Corporate tax rate of 27% is the nominal tax rate for Axcelis Technologies, Inc.. In reality, companies find ways to pay much less taxes than that or not to pay them at all.

Cash flow adjustment could be used for any adjustment the investor deems necessary. Most commonly we use this field to account for stock options-related effects in excess of what is reported on the company's income statement. The cash flow adjustment is expressed as a percentage of the revenue, and in the current valuation of the ACLS 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 ACLS are equal to 8.7%.

Life of production assets of 6.7 years is the average useful life of capital assets used in Axcelis Technologies, Inc. operations. It is used to calculate yearly capital expenditures needed to keep these assets in good order - we call it the maintenance CAPEX.

Working capital is the difference between the company's current assets and liabilities. In the model we use the ratio of working capital to revenue, which for ACLS is equal to 30.2%. 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 - $408.337 million for Axcelis Technologies, Inc. - is used in calculation of the "floor" for intrinsic valuation based on the discounted cash flow (DCF) method. Even if the prospects are very bad for a company, its assets could always be sold now for their current fair market value.

Shares outstanding of 32.741 million for Axcelis Technologies, Inc. is needed to calculate the intrinsic value of one share.

Market capitalization is used here only for reference purposes and as a quick check that the share price and the number of shares outstanding numbers are correct - something especially to be cognizant about at stock splits. So, the market capitalization of Axcelis Technologies, Inc. at the current share price and the inputted number of shares is $0.7 billion.

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