Intrinsic value of American Electric Technologies - AETI

Previous Close

$1.40

  Intrinsic Value

$37.99

stock screener

  Rating & Target

str. buy

+999%

Previous close

$1.40

 
Intrinsic value

$37.99

 
Up/down potential

+999%

 
Rating

str. buy

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

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.

Please visit our new site that uses elements of artificial intelligence for stock valuation: artificial intelligence value of American Electric Technologies (AETI) stock.

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, %
  -22.45
  44.40
  40.46
  36.91
  33.72
  30.85
  28.27
  25.94
  23.84
  21.96
  20.26
  18.74
  17.36
  16.13
  15.01
  14.01
  13.11
  12.30
  11.57
  10.91
  10.32
  9.79
  9.31
  8.88
  8.49
  8.14
  7.83
  7.55
  7.29
  7.06
  6.86
Revenue, $m
  38
  55
  77
  106
  141
  185
  237
  298
  369
  451
  542
  643
  755
  877
  1,008
  1,150
  1,301
  1,460
  1,629
  1,807
  1,994
  2,189
  2,393
  2,605
  2,827
  3,057
  3,296
  3,545
  3,803
  4,072
  4,351
Variable operating expenses, $m
 
  30
  43
  58
  78
  102
  131
  165
  204
  249
  300
  356
  418
  485
  558
  636
  719
  808
  901
  999
  1,103
  1,211
  1,323
  1,441
  1,563
  1,690
  1,823
  1,960
  2,103
  2,252
  2,406
Fixed operating expenses, $m
 
  26
  26
  27
  28
  28
  29
  30
  30
  31
  32
  33
  34
  34
  35
  36
  37
  38
  39
  40
  41
  42
  43
  44
  45
  46
  48
  49
  50
  51
  52
Total operating expenses, $m
  45
  56
  69
  85
  106
  130
  160
  195
  234
  280
  332
  389
  452
  519
  593
  672
  756
  846
  940
  1,039
  1,144
  1,253
  1,366
  1,485
  1,608
  1,736
  1,871
  2,009
  2,153
  2,303
  2,458
Operating income, $m
  -7
  -1
  8
  20
  35
  54
  77
  104
  135
  170
  210
  255
  304
  357
  415
  478
  544
  615
  689
  768
  850
  937
  1,027
  1,120
  1,218
  1,320
  1,426
  1,536
  1,650
  1,769
  1,892
EBITDA, $m
  -6
  0
  10
  23
  39
  59
  83
  111
  144
  182
  224
  272
  324
  381
  442
  508
  579
  653
  732
  816
  903
  994
  1,090
  1,189
  1,293
  1,401
  1,513
  1,629
  1,750
  1,876
  2,007
Interest expense (income), $m
  0
  0
  0
  1
  1
  2
  2
  3
  4
  5
  7
  8
  10
  11
  13
  15
  18
  20
  22
  25
  28
  31
  34
  37
  40
  44
  47
  51
  55
  59
  63
Earnings before tax, $m
  -7
  -1
  8
  19
  34
  52
  74
  100
  130
  165
  204
  247
  294
  346
  402
  462
  527
  595
  667
  743
  822
  906
  993
  1,084
  1,178
  1,276
  1,378
  1,485
  1,595
  1,710
  1,829
Tax expense, $m
  0
  0
  2
  5
  9
  14
  20
  27
  35
  45
  55
  67
  79
  93
  109
  125
  142
  161
  180
  201
  222
  245
  268
  293
  318
  345
  372
  401
  431
  462
  494
Net income, $m
  -7
  -1
  6
  14
  25
  38
  54
  73
  95
  120
  149
  180
  215
  253
  294
  338
  384
  434
  487
  542
  600
  661
  725
  791
  860
  932
  1,006
  1,084
  1,164
  1,248
  1,335

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
  35
  48
  67
  92
  122
  160
  206
  259
  321
  391
  470
  558
  655
  761
  875
  998
  1,129
  1,268
  1,414
  1,569
  1,731
  1,900
  2,077
  2,262
  2,454
  2,653
  2,861
  3,077
  3,301
  3,535
  3,777
Adjusted assets (=assets-cash), $m
  33
  48
  67
  92
  122
  160
  206
  259
  321
  391
  470
  558
  655
  761
  875
  998
  1,129
  1,268
  1,414
  1,569
  1,731
  1,900
  2,077
  2,262
  2,454
  2,653
  2,861
  3,077
  3,301
  3,535
  3,777
Revenue / Adjusted assets
  1.152
  1.146
  1.149
  1.152
  1.156
  1.156
  1.150
  1.151
  1.150
  1.153
  1.153
  1.152
  1.153
  1.152
  1.152
  1.152
  1.152
  1.151
  1.152
  1.152
  1.152
  1.152
  1.152
  1.152
  1.152
  1.152
  1.152
  1.152
  1.152
  1.152
  1.152
Average production assets, $m
  8
  12
  16
  22
  30
  39
  50
  63
  78
  95
  114
  136
  159
  185
  213
  243
  274
  308
  344
  381
  421
  462
  505
  550
  596
  645
  695
  748
  802
  859
  918
Working capital, $m
  3
  4
  6
  8
  11
  15
  19
  24
  29
  36
  43
  51
  60
  69
  80
  91
  103
  115
  129
  143
  158
  173
  189
  206
  223
  241
  260
  280
  300
  322
  344
Total debt, $m
  6
  12
  21
  34
  50
  70
  93
  120
  152
  188
  229
  275
  325
  379
  438
  501
  568
  640
  715
  795
  878
  966
  1,057
  1,152
  1,251
  1,354
  1,461
  1,572
  1,687
  1,807
  1,932
Total liabilities, $m
  20
  25
  34
  47
  63
  83
  106
  133
  165
  201
  242
  288
  338
  392
  451
  514
  581
  653
  728
  808
  891
  979
  1,070
  1,165
  1,264
  1,367
  1,474
  1,585
  1,700
  1,820
  1,945
Total equity, $m
  16
  23
  32
  44
  59
  78
  100
  126
  156
  190
  228
  271
  318
  369
  425
  484
  548
  615
  686
  761
  839
  922
  1,007
  1,097
  1,190
  1,287
  1,388
  1,492
  1,601
  1,714
  1,832
Total liabilities and equity, $m
  36
  48
  66
  91
  122
  161
  206
  259
  321
  391
  470
  559
  656
  761
  876
  998
  1,129
  1,268
  1,414
  1,569
  1,730
  1,901
  2,077
  2,262
  2,454
  2,654
  2,862
  3,077
  3,301
  3,534
  3,777
Debt-to-equity ratio
  0.375
  0.500
  0.660
  0.770
  0.840
  0.890
  0.930
  0.960
  0.980
  0.990
  1.000
  1.010
  1.020
  1.030
  1.030
  1.030
  1.040
  1.040
  1.040
  1.040
  1.050
  1.050
  1.050
  1.050
  1.050
  1.050
  1.050
  1.050
  1.050
  1.050
  1.050
Adjusted equity ratio
  0.485
  0.485
  0.485
  0.485
  0.485
  0.485
  0.485
  0.485
  0.485
  0.485
  0.485
  0.485
  0.485
  0.485
  0.485
  0.485
  0.485
  0.485
  0.485
  0.485
  0.485
  0.485
  0.485
  0.485
  0.485
  0.485
  0.485
  0.485
  0.485
  0.485
  0.485

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  -7
  -1
  6
  14
  25
  38
  54
  73
  95
  120
  149
  180
  215
  253
  294
  338
  384
  434
  487
  542
  600
  661
  725
  791
  860
  932
  1,006
  1,084
  1,164
  1,248
  1,335
Depreciation, amort., depletion, $m
  1
  1
  2
  3
  4
  5
  6
  8
  10
  12
  14
  17
  20
  23
  27
  30
  34
  39
  43
  48
  53
  58
  63
  69
  75
  81
  87
  93
  100
  107
  115
Funds from operations, $m
  -8
  0
  8
  17
  29
  43
  61
  81
  105
  132
  163
  197
  235
  276
  320
  368
  419
  473
  530
  590
  653
  719
  788
  860
  934
  1,012
  1,093
  1,177
  1,265
  1,356
  1,450
Change in working capital, $m
  -1
  1
  2
  2
  3
  3
  4
  5
  6
  6
  7
  8
  9
  10
  10
  11
  12
  13
  13
  14
  15
  15
  16
  17
  17
  18
  19
  20
  20
  21
  22
Cash from operations, $m
  -7
  -1
  6
  15
  26
  40
  56
  76
  99
  126
  156
  189
  226
  266
  310
  357
  407
  460
  517
  576
  638
  704
  772
  843
  917
  994
  1,074
  1,158
  1,244
  1,334
  1,428
Maintenance CAPEX, $m
  0
  -1
  -1
  -2
  -3
  -4
  -5
  -6
  -8
  -10
  -12
  -14
  -17
  -20
  -23
  -27
  -30
  -34
  -39
  -43
  -48
  -53
  -58
  -63
  -69
  -75
  -81
  -87
  -93
  -100
  -107
New CAPEX, $m
  -1
  -4
  -5
  -6
  -8
  -9
  -11
  -13
  -15
  -17
  -19
  -21
  -24
  -26
  -28
  -30
  -32
  -34
  -36
  -38
  -39
  -41
  -43
  -45
  -47
  -49
  -50
  -52
  -55
  -57
  -59
Cash from investing activities, $m
  0
  -5
  -6
  -8
  -11
  -13
  -16
  -19
  -23
  -27
  -31
  -35
  -41
  -46
  -51
  -57
  -62
  -68
  -75
  -81
  -87
  -94
  -101
  -108
  -116
  -124
  -131
  -139
  -148
  -157
  -166
Free cash flow, $m
  -7
  -6
  0
  7
  16
  27
  41
  57
  76
  99
  125
  153
  185
  221
  259
  300
  345
  392
  442
  495
  551
  610
  671
  735
  802
  871
  943
  1,018
  1,096
  1,177
  1,262
Issuance/(repayment) of debt, $m
  0
  8
  10
  13
  16
  19
  23
  27
  32
  36
  41
  45
  50
  54
  59
  63
  67
  72
  76
  80
  83
  87
  91
  95
  99
  103
  107
  111
  116
  120
  125
Issuance/(repurchase) of shares, $m
  0
  8
  4
  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  
  0
  16
  14
  13
  16
  19
  23
  27
  32
  36
  41
  45
  50
  54
  59
  63
  67
  72
  76
  80
  83
  87
  91
  95
  99
  103
  107
  111
  116
  120
  125
Total cash flow (excl. dividends), $m
  -6
  10
  13
  19
  32
  46
  64
  85
  108
  135
  165
  199
  235
  275
  318
  363
  412
  464
  518
  575
  635
  697
  762
  830
  901
  974
  1,050
  1,129
  1,212
  1,297
  1,387
Retained Cash Flow (-), $m
  7
  -8
  -9
  -12
  -15
  -18
  -22
  -26
  -30
  -34
  -38
  -43
  -47
  -51
  -55
  -59
  -63
  -67
  -71
  -75
  -79
  -82
  -86
  -89
  -93
  -97
  -101
  -105
  -109
  -113
  -118
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
 
  2
  4
  7
  17
  28
  42
  59
  78
  101
  127
  156
  188
  224
  262
  304
  349
  396
  447
  500
  556
  615
  676
  740
  807
  877
  949
  1,025
  1,103
  1,184
  1,269
Discount rate, %
 
  7.10
  7.46
  7.83
  8.22
  8.63
  9.06
  9.51
  9.99
  10.49
  11.01
  11.57
  12.14
  12.75
  13.39
  14.06
  14.76
  15.50
  16.27
  17.09
  17.94
  18.84
  19.78
  20.77
  21.81
  22.90
  24.04
  25.25
  26.51
  27.83
  29.22
PV of cash for distribution, $m
 
  2
  4
  6
  12
  18
  25
  31
  37
  41
  45
  47
  48
  47
  45
  42
  39
  34
  30
  25
  21
  16
  13
  10
  7
  5
  4
  2
  2
  1
  1
Current shareholders' claim on cash, %
  100
  58.0
  47.5
  47.5
  47.5
  47.5
  47.5
  47.5
  47.5
  47.5
  47.5
  47.5
  47.5
  47.5
  47.5
  47.5
  47.5
  47.5
  47.5
  47.5
  47.5
  47.5
  47.5
  47.5
  47.5
  47.5
  47.5
  47.5
  47.5
  47.5
  47.5

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 (AETI)

Valuation Ratios
P/E Ratio -1.7
Price to Sales 0.3
Price to Book 0.7
Price to Tangible Book
Price to Cash Flow -1.7
Price to Free Cash Flow -1.5
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 $38 million for the last fiscal year's total revenue generated by American Electric Technologies. The default revenue input number comes from 2016 income statement of American Electric 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 AETI stock valuation model: a) initial revenue growth rate of 44.4% 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 7.1%, whose default value for AETI is calculated based on our internal credit rating of American Electric 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 American Electric 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 AETI stock the variable cost ratio is equal to 55.3%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $25 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 3.5% for American Electric Technologies.

Corporate tax rate of 27% is the nominal tax rate for American Electric 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 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 21.1%.

Life of production assets of 8 years is the average useful life of capital assets used in American Electric 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 AETI is equal to 7.9%. 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 - $16 million for American Electric 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 8.233 million for American Electric 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 American Electric Technologies at the current share price and the inputted number of shares is $0.0 billion.

RELATED COMPANIES Price Int.Val. Rating
POWL Powell Industr 28.17 6.88  str.sell
NOV National Oilwe 35.61 5.26  str.sell
GE General Electr 15.05 46.28  str.buy
TRN Trinity Indust 34.84 34.69  hold
CMI Cummins 165.60 283.28  str.buy
TDW Tidewater 25.24 18.18  sell
CAT Caterpillar 156.29 289.16  str.buy
NRG NRG Energy 25.22 1.11  str.sell

COMPANY NEWS

▶ AETI Announces Impact of Tax Act on 2017 Financial Results   [Jan-31-18 03:23PM  GlobeNewswire]
▶ AETI announces continued top line and bottom line growth   [Nov-14-17 07:00AM  GlobeNewswire]
▶ AETI Announces 61% quarterly revenue growth   [Aug-08-17 07:00AM  GlobeNewswire]
▶ AETI reports discussions with Director Casey Crenshaw   [Jun-12-17 07:00AM  GlobeNewswire]
▶ AETI Announces Q1 results   [May-15-17 07:00AM  GlobeNewswire]
▶ AETI Announces Q4 and FY2016 Results   [07:00AM  GlobeNewswire]
▶ M&I Electric celebrates 70 year anniversary   [Nov-17-16 02:00PM  GlobeNewswire]
▶ AETI Announces Q3 2016 Results   [07:00AM  GlobeNewswire]
▶ AETI Announces Q2 2016 Results   [07:00AM  GlobeNewswire]
▶ AETI Announces Q1 2016 Results   [07:00AM  GlobeNewswire]
▶ AETI announces 2015 Q4 and year-end results   [07:00AM  GlobeNewswire]
▶ AETI Announces New $8.5 Million Credit Facility   [Jan-05-16 08:00AM  GlobeNewswire]
▶ AETI Announces Third Quarter Results   [07:00AM  GlobeNewswire]
▶ 10-Q for American Electric Technologies, Inc.   [Aug-15  08:10PM  at Company Spotlight]
▶ AEP awaiting industry-altering Clean Power Plan   [10:30AM  at bizjournals.com]
Financial statements of AETI
Follow us on:   twitter   twitter   twitter   twitter

ASSET ALLOCATION

About X-FIN       Site news       Privacy policy       Terms of use       FAQ

Copyright © X-FIN.com 2005-2018. All rigths reserved.