Intrinsic value of American Electric Technologies, Inc. - AETI

Previous Close

$0.83

  Intrinsic Value

$14.12

stock screener

  Rating & Target

str. buy

+999%

Previous close

$0.83

 
Intrinsic value

$14.12

 
Up/down potential

+999%

 
Rating

str. buy

We calculate the intrinsic value of AETI 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 0.0

 

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, %
  32.80
  30.02
  27.52
  25.27
  23.24
  21.42
  19.77
  18.30
  16.97
  15.77
  14.69
  13.72
  12.85
  12.07
  11.36
  10.72
  10.15
  9.64
  9.17
  8.76
  8.38
  8.04
  7.74
  7.46
  7.22
  7.00
  6.80
  6.62
  6.45
  6.31
Revenue, $m
  62
  81
  103
  130
  160
  194
  232
  275
  321
  372
  427
  485
  548
  614
  684
  757
  834
  914
  998
  1,085
  1,176
  1,271
  1,369
  1,471
  1,578
  1,688
  1,803
  1,922
  2,046
  2,175
Variable operating expenses, $m
  44
  57
  73
  91
  112
  136
  163
  192
  225
  261
  299
  340
  383
  430
  478
  530
  584
  640
  698
  760
  823
  889
  958
  1,030
  1,104
  1,181
  1,262
  1,345
  1,432
  1,522
Fixed operating expenses, $m
  18
  19
  19
  20
  20
  21
  21
  21
  22
  22
  23
  23
  24
  24
  25
  25
  26
  27
  27
  28
  28
  29
  30
  30
  31
  32
  32
  33
  34
  35
Total operating expenses, $m
  62
  76
  92
  111
  132
  157
  184
  213
  247
  283
  322
  363
  407
  454
  503
  555
  610
  667
  725
  788
  851
  918
  988
  1,060
  1,135
  1,213
  1,294
  1,378
  1,466
  1,557
Operating income, $m
  0
  5
  12
  19
  28
  38
  49
  61
  74
  89
  105
  122
  141
  160
  180
  202
  224
  248
  272
  298
  325
  352
  381
  411
  442
  475
  509
  544
  580
  618
EBITDA, $m
  1
  7
  14
  22
  31
  41
  53
  66
  80
  96
  113
  131
  150
  171
  192
  215
  239
  264
  290
  317
  345
  375
  405
  437
  470
  504
  540
  577
  616
  656
Interest expense (income), $m
  0
  1
  3
  5
  7
  9
  13
  16
  20
  24
  29
  34
  40
  45
  52
  58
  65
  73
  81
  89
  97
  106
  115
  125
  135
  145
  156
  167
  179
  191
  203
Earnings before tax, $m
  -1
  3
  7
  12
  18
  25
  33
  41
  50
  60
  71
  83
  95
  108
  122
  136
  151
  167
  184
  201
  218
  237
  256
  276
  297
  319
  342
  365
  390
  415
Tax expense, $m
  0
  1
  2
  3
  5
  7
  9
  11
  14
  16
  19
  22
  26
  29
  33
  37
  41
  45
  50
  54
  59
  64
  69
  75
  80
  86
  92
  99
  105
  112
Net income, $m
  -1
  2
  5
  9
  13
  18
  24
  30
  37
  44
  52
  60
  69
  79
  89
  99
  110
  122
  134
  146
  160
  173
  187
  202
  217
  233
  249
  266
  284
  303

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
  48
  62
  79
  99
  122
  148
  178
  210
  246
  285
  326
  371
  419
  469
  523
  579
  637
  699
  763
  830
  899
  972
  1,047
  1,125
  1,206
  1,291
  1,378
  1,469
  1,564
  1,663
Adjusted assets (=assets-cash), $m
  48
  62
  79
  99
  122
  148
  178
  210
  246
  285
  326
  371
  419
  469
  523
  579
  637
  699
  763
  830
  899
  972
  1,047
  1,125
  1,206
  1,291
  1,378
  1,469
  1,564
  1,663
Revenue / Adjusted assets
  1.292
  1.306
  1.304
  1.313
  1.311
  1.311
  1.303
  1.310
  1.305
  1.305
  1.310
  1.307
  1.308
  1.309
  1.308
  1.307
  1.309
  1.308
  1.308
  1.307
  1.308
  1.308
  1.308
  1.308
  1.308
  1.308
  1.308
  1.308
  1.308
  1.308
Average production assets, $m
  5
  7
  9
  11
  14
  17
  20
  24
  28
  32
  37
  42
  48
  53
  59
  66
  73
  80
  87
  94
  102
  111
  119
  128
  137
  147
  157
  167
  178
  189
Working capital, $m
  2
  2
  3
  4
  4
  5
  6
  7
  9
  10
  12
  13
  15
  17
  18
  20
  23
  25
  27
  29
  32
  34
  37
  40
  43
  46
  49
  52
  55
  59
Total debt, $m
  14
  25
  37
  51
  68
  87
  108
  131
  157
  185
  215
  247
  281
  318
  356
  396
  438
  483
  529
  577
  627
  679
  733
  789
  847
  908
  971
  1,037
  1,105
  1,176
Total liabilities, $m
  34
  45
  57
  71
  88
  107
  128
  151
  177
  205
  235
  267
  301
  337
  376
  416
  458
  503
  549
  597
  647
  699
  753
  809
  867
  928
  991
  1,057
  1,125
  1,196
Total equity, $m
  13
  17
  22
  28
  34
  42
  50
  59
  69
  80
  92
  104
  118
  132
  147
  163
  179
  196
  214
  233
  253
  273
  294
  316
  339
  363
  387
  413
  440
  467
Total liabilities and equity, $m
  47
  62
  79
  99
  122
  149
  178
  210
  246
  285
  327
  371
  419
  469
  523
  579
  637
  699
  763
  830
  900
  972
  1,047
  1,125
  1,206
  1,291
  1,378
  1,470
  1,565
  1,663
Debt-to-equity ratio
  1.080
  1.420
  1.670
  1.850
  1.980
  2.080
  2.160
  2.220
  2.270
  2.310
  2.340
  2.370
  2.390
  2.410
  2.420
  2.440
  2.450
  2.460
  2.470
  2.470
  2.480
  2.490
  2.490
  2.500
  2.500
  2.500
  2.510
  2.510
  2.510
  2.520
Adjusted equity ratio
  0.281
  0.281
  0.281
  0.281
  0.281
  0.281
  0.281
  0.281
  0.281
  0.281
  0.281
  0.281
  0.281
  0.281
  0.281
  0.281
  0.281
  0.281
  0.281
  0.281
  0.281
  0.281
  0.281
  0.281
  0.281
  0.281
  0.281
  0.281
  0.281
  0.281

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  -1
  2
  5
  9
  13
  18
  24
  30
  37
  44
  52
  60
  69
  79
  89
  99
  110
  122
  134
  146
  160
  173
  187
  202
  217
  233
  249
  266
  284
  303
Depreciation, amort., depletion, $m
  1
  2
  2
  2
  3
  3
  4
  5
  6
  7
  7
  8
  10
  11
  12
  13
  15
  16
  17
  19
  20
  22
  24
  26
  27
  29
  31
  33
  36
  38
Funds from operations, $m
  0
  4
  7
  11
  16
  22
  28
  35
  42
  51
  59
  69
  79
  90
  101
  113
  125
  138
  151
  165
  180
  195
  211
  227
  244
  262
  281
  300
  320
  341
Change in working capital, $m
  0
  1
  1
  1
  1
  1
  1
  1
  1
  1
  1
  2
  2
  2
  2
  2
  2
  2
  2
  2
  2
  3
  3
  3
  3
  3
  3
  3
  3
  3
Cash from operations, $m
  0
  3
  7
  11
  15
  21
  27
  34
  41
  49
  58
  67
  77
  88
  99
  111
  123
  136
  149
  163
  178
  193
  208
  225
  242
  259
  278
  297
  317
  337
Maintenance CAPEX, $m
  -1
  -1
  -1
  -2
  -2
  -3
  -3
  -4
  -5
  -6
  -6
  -7
  -8
  -10
  -11
  -12
  -13
  -15
  -16
  -17
  -19
  -20
  -22
  -24
  -26
  -27
  -29
  -31
  -33
  -36
New CAPEX, $m
  -1
  -2
  -2
  -2
  -3
  -3
  -3
  -4
  -4
  -4
  -5
  -5
  -5
  -6
  -6
  -6
  -7
  -7
  -7
  -8
  -8
  -8
  -9
  -9
  -9
  -10
  -10
  -10
  -11
  -11
Cash from investing activities, $m
  -2
  -3
  -3
  -4
  -5
  -6
  -6
  -8
  -9
  -10
  -11
  -12
  -13
  -16
  -17
  -18
  -20
  -22
  -23
  -25
  -27
  -28
  -31
  -33
  -35
  -37
  -39
  -41
  -44
  -47
Free cash flow, $m
  -2
  0
  3
  7
  11
  15
  20
  26
  32
  39
  47
  55
  63
  73
  82
  92
  103
  114
  126
  138
  151
  164
  178
  192
  207
  222
  238
  255
  272
  290
Issuance/(repayment) of debt, $m
  8
  10
  12
  14
  17
  19
  21
  23
  26
  28
  30
  32
  34
  36
  38
  40
  42
  44
  46
  48
  50
  52
  54
  56
  58
  61
  63
  66
  68
  71
Issuance/(repurchase) of shares, $m
  4
  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
Cash from financing (excl. dividends), $m  
  12
  12
  12
  14
  17
  19
  21
  23
  26
  28
  30
  32
  34
  36
  38
  40
  42
  44
  46
  48
  50
  52
  54
  56
  58
  61
  63
  66
  68
  71
Total cash flow (excl. dividends), $m
  10
  13
  15
  21
  27
  34
  41
  49
  58
  67
  77
  87
  98
  109
  121
  133
  145
  158
  172
  186
  201
  216
  232
  248
  265
  283
  301
  321
  341
  361
Retained Cash Flow (-), $m
  -4
  -4
  -5
  -6
  -6
  -7
  -8
  -9
  -10
  -11
  -12
  -13
  -13
  -14
  -15
  -16
  -17
  -17
  -18
  -19
  -20
  -20
  -21
  -22
  -23
  -24
  -25
  -26
  -27
  -28
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
  6
  9
  11
  15
  21
  27
  33
  40
  48
  56
  65
  74
  84
  95
  106
  117
  129
  141
  154
  167
  181
  196
  211
  226
  242
  259
  277
  295
  314
  334
Discount rate, %
  8.20
  8.61
  9.04
  9.49
  9.97
  10.47
  10.99
  11.54
  12.12
  12.72
  13.36
  14.02
  14.73
  15.46
  16.24
  17.05
  17.90
  18.79
  19.73
  20.72
  21.76
  22.84
  23.99
  25.19
  26.45
  27.77
  29.16
  30.61
  32.15
  33.75
PV of cash for distribution, $m
  6
  7
  8
  11
  13
  15
  16
  17
  17
  17
  16
  15
  14
  13
  11
  9
  8
  6
  5
  4
  3
  2
  1
  1
  1
  0
  0
  0
  0
  0
Current shareholders' claim on cash, %
  64.3
  53.6
  53.6
  53.6
  53.6
  53.6
  53.6
  53.6
  53.6
  53.6
  53.6
  53.6
  53.6
  53.6
  53.6
  53.6
  53.6
  53.6
  53.6
  53.6
  53.6
  53.6
  53.6
  53.6
  53.6
  53.6
  53.6
  53.6
  53.6
  53.6

American Electric Technologies, Inc. is a provider of power delivery solutions to the global energy industry. The Company serves a range of markets, such as power generation and distribution, oil and gas, and marine and industrial. It provides power delivery solutions for the power generation and distribution market sectors. It works with turbine manufacturers, engine-generator manufacturers and dealers, engineering, procurement and construction (EPC) firms, and high voltage service companies to provide electric power delivery products and solutions. It designs, manufactures, commissions and maintains its equipment for implementation in base-load, peaking power, cogeneration and substation transmission facilities across the world. It provides power delivery solutions for the upstream, midstream and downstream oil and natural gas sectors. Its industrial markets include non-oil and gas industrial markets, such as steel, paper, heavy commercial, and other non-oil and gas applications.

FINANCIAL RATIOS  of  American Electric Technologies, Inc. (AETI)

Valuation Ratios
P/E Ratio -1
Price to Sales 0.2
Price to Book 0.4
Price to Tangible Book
Price to Cash Flow -1
Price to Free Cash Flow -0.9
Growth Rates
Sales Growth Rate -22.4%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate 0%
Cap. Spend. - 3 Yr. Gr. Rate -12.9%
Financial Strength
Quick Ratio 1
Current Ratio 0.5
LT Debt to Equity 25%
Total Debt to Equity 37.5%
Interest Coverage 0
Management Effectiveness
Return On Assets -18.9%
Ret/ On Assets - 3 Yr. Avg. -12.5%
Return On Total Capital -27.5%
Ret/ On T. Cap. - 3 Yr. Avg. -18%
Return On Equity -35.9%
Return On Equity - 3 Yr. Avg. -22%
Asset Turnover 1
Profitability Ratios
Gross Margin 2.6%
Gross Margin - 3 Yr. Avg. 8.6%
EBITDA Margin -15.8%
EBITDA Margin - 3 Yr. Avg. -6.5%
Operating Margin -18.4%
Oper. Margin - 3 Yr. Avg. -9.8%
Pre-Tax Margin -18.4%
Pre-Tax Margin - 3 Yr. Avg. -8.7%
Net Profit Margin -18.4%
Net Profit Margin - 3 Yr. Avg. -11.1%
Effective Tax Rate 0%
Eff/ Tax Rate - 3 Yr. Avg. -16.7%
Payout Ratio 0%

AETI stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the AETI stock intrinsic value calculation we used $47 million for the last fiscal year's total revenue generated by American Electric Technologies, Inc.. The default revenue input number comes from 0001 income statement of American Electric 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 AETI stock valuation model: a) initial revenue growth rate of 32.8% 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 8.2%, whose default value for AETI is calculated based on our internal credit rating of American Electric 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 American Electric 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 AETI stock the variable cost ratio is equal to 70.2%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $18 million in the base year in the intrinsic value calculation for AETI 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 18.4% for American Electric Technologies, Inc..

Corporate tax rate of 27% is the nominal tax rate for American Electric 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 AETI 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 AETI are equal to 8.7%.

Life of production assets of 5 years is the average useful life of capital assets used in American Electric 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 AETI is equal to 2.7%. 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 - $10.083 million for American Electric 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 9.074 million for American Electric 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 American Electric Technologies, Inc. at the current share price and the inputted number of shares is $0.0 billion.

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