Intrinsic value of Aerojet Rocketdyne Holdings, Inc. - AJRD

Previous Close

$32.24

  Intrinsic Value

$30.93

stock screener

  Rating & Target

hold

-4%

Previous close

$32.24

 
Intrinsic value

$30.93

 
Up/down potential

-4%

 
Rating

hold

We calculate the intrinsic value of AJRD 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 2.5

 

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
  1,934
  1,978
  2,029
  2,086
  2,150
  2,219
  2,295
  2,376
  2,464
  2,559
  2,660
  2,768
  2,883
  3,005
  3,135
  3,272
  3,418
  3,572
  3,734
  3,906
  4,087
  4,278
  4,479
  4,691
  4,914
  5,149
  5,397
  5,657
  5,931
  6,219
Variable operating expenses, $m
  1,732
  1,772
  1,817
  1,867
  1,923
  1,984
  2,051
  2,123
  2,201
  2,285
  2,351
  2,446
  2,548
  2,656
  2,770
  2,892
  3,020
  3,156
  3,300
  3,451
  3,611
  3,780
  3,958
  4,145
  4,343
  4,551
  4,769
  4,999
  5,241
  5,496
Fixed operating expenses, $m
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -2
  -2
  -2
  -2
  -2
  -2
  -2
  -2
  -2
  -2
  -2
  -2
Total operating expenses, $m
  1,731
  1,771
  1,816
  1,866
  1,922
  1,983
  2,050
  2,122
  2,200
  2,284
  2,350
  2,445
  2,547
  2,655
  2,769
  2,891
  3,019
  3,155
  3,298
  3,449
  3,609
  3,778
  3,956
  4,143
  4,341
  4,549
  4,767
  4,997
  5,239
  5,494
Operating income, $m
  203
  208
  214
  220
  228
  236
  245
  254
  265
  276
  311
  323
  337
  351
  366
  382
  399
  417
  436
  456
  477
  499
  522
  547
  573
  601
  629
  660
  692
  725
EBITDA, $m
  285
  292
  299
  308
  317
  327
  338
  350
  363
  377
  392
  408
  425
  443
  462
  482
  503
  526
  550
  575
  602
  630
  659
  691
  723
  758
  794
  833
  873
  915
Interest expense (income), $m
  0
  34
  37
  39
  42
  45
  49
  53
  57
  61
  66
  72
  77
  83
  90
  97
  104
  112
  120
  128
  138
  147
  157
  168
  179
  191
  204
  217
  231
  245
  261
Earnings before tax, $m
  168
  171
  175
  179
  183
  187
  192
  197
  203
  209
  239
  246
  253
  261
  269
  278
  287
  297
  307
  318
  330
  342
  355
  368
  382
  397
  413
  429
  446
  464
Tax expense, $m
  45
  46
  47
  48
  49
  51
  52
  53
  55
  56
  65
  66
  68
  70
  73
  75
  78
  80
  83
  86
  89
  92
  96
  99
  103
  107
  111
  116
  120
  125
Net income, $m
  123
  125
  128
  130
  133
  137
  140
  144
  148
  153
  174
  180
  185
  191
  197
  203
  210
  217
  224
  232
  241
  249
  259
  269
  279
  290
  301
  313
  326
  339

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
  2,402
  2,458
  2,521
  2,592
  2,670
  2,756
  2,850
  2,952
  3,061
  3,179
  3,305
  3,439
  3,582
  3,733
  3,894
  4,065
  4,246
  4,437
  4,639
  4,852
  5,077
  5,314
  5,564
  5,827
  6,105
  6,397
  6,704
  7,028
  7,368
  7,726
Adjusted assets (=assets-cash), $m
  2,402
  2,458
  2,521
  2,592
  2,670
  2,756
  2,850
  2,952
  3,061
  3,179
  3,305
  3,439
  3,582
  3,733
  3,894
  4,065
  4,246
  4,437
  4,639
  4,852
  5,077
  5,314
  5,564
  5,827
  6,105
  6,397
  6,704
  7,028
  7,368
  7,726
Revenue / Adjusted assets
  0.805
  0.805
  0.805
  0.805
  0.805
  0.805
  0.805
  0.805
  0.805
  0.805
  0.805
  0.805
  0.805
  0.805
  0.805
  0.805
  0.805
  0.805
  0.805
  0.805
  0.805
  0.805
  0.805
  0.805
  0.805
  0.805
  0.805
  0.805
  0.805
  0.805
Average production assets, $m
  509
  520
  534
  549
  565
  584
  603
  625
  648
  673
  700
  728
  758
  790
  825
  861
  899
  939
  982
  1,027
  1,075
  1,125
  1,178
  1,234
  1,292
  1,354
  1,419
  1,488
  1,560
  1,636
Working capital, $m
  -114
  -117
  -120
  -123
  -127
  -131
  -135
  -140
  -145
  -151
  -157
  -163
  -170
  -177
  -185
  -193
  -202
  -211
  -220
  -230
  -241
  -252
  -264
  -277
  -290
  -304
  -318
  -334
  -350
  -367
Total debt, $m
  664
  709
  761
  819
  884
  955
  1,032
  1,115
  1,205
  1,302
  1,405
  1,515
  1,632
  1,757
  1,889
  2,029
  2,177
  2,334
  2,500
  2,675
  2,860
  3,054
  3,260
  3,476
  3,704
  3,943
  4,196
  4,461
  4,741
  5,035
Total liabilities, $m
  1,972
  2,018
  2,070
  2,128
  2,192
  2,263
  2,340
  2,424
  2,513
  2,610
  2,713
  2,823
  2,940
  3,065
  3,197
  3,337
  3,486
  3,643
  3,808
  3,983
  4,168
  4,363
  4,568
  4,784
  5,012
  5,252
  5,504
  5,770
  6,049
  6,343
Total equity, $m
  430
  440
  451
  464
  478
  493
  510
  528
  548
  569
  592
  616
  641
  668
  697
  728
  760
  794
  830
  868
  909
  951
  996
  1,043
  1,093
  1,145
  1,200
  1,258
  1,319
  1,383
Total liabilities and equity, $m
  2,402
  2,458
  2,521
  2,592
  2,670
  2,756
  2,850
  2,952
  3,061
  3,179
  3,305
  3,439
  3,581
  3,733
  3,894
  4,065
  4,246
  4,437
  4,638
  4,851
  5,077
  5,314
  5,564
  5,827
  6,105
  6,397
  6,704
  7,028
  7,368
  7,726
Debt-to-equity ratio
  1.540
  1.610
  1.690
  1.770
  1.850
  1.940
  2.020
  2.110
  2.200
  2.290
  2.370
  2.460
  2.550
  2.630
  2.710
  2.790
  2.870
  2.940
  3.010
  3.080
  3.150
  3.210
  3.270
  3.330
  3.390
  3.440
  3.500
  3.550
  3.590
  3.640
Adjusted equity ratio
  0.179
  0.179
  0.179
  0.179
  0.179
  0.179
  0.179
  0.179
  0.179
  0.179
  0.179
  0.179
  0.179
  0.179
  0.179
  0.179
  0.179
  0.179
  0.179
  0.179
  0.179
  0.179
  0.179
  0.179
  0.179
  0.179
  0.179
  0.179
  0.179
  0.179

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  123
  125
  128
  130
  133
  137
  140
  144
  148
  153
  174
  180
  185
  191
  197
  203
  210
  217
  224
  232
  241
  249
  259
  269
  279
  290
  301
  313
  326
  339
Depreciation, amort., depletion, $m
  82
  84
  85
  87
  89
  91
  93
  96
  99
  102
  81
  85
  88
  92
  96
  100
  105
  109
  114
  119
  125
  131
  137
  143
  150
  157
  165
  173
  181
  190
Funds from operations, $m
  205
  209
  213
  217
  222
  228
  234
  240
  247
  254
  256
  264
  273
  282
  292
  303
  314
  326
  339
  352
  366
  380
  396
  412
  429
  447
  466
  486
  507
  529
Change in working capital, $m
  -2
  -3
  -3
  -3
  -4
  -4
  -4
  -5
  -5
  -6
  -6
  -6
  -7
  -7
  -8
  -8
  -9
  -9
  -10
  -10
  -11
  -11
  -12
  -13
  -13
  -14
  -15
  -15
  -16
  -17
Cash from operations, $m
  207
  211
  216
  221
  226
  232
  238
  245
  252
  260
  262
  271
  280
  290
  300
  311
  323
  335
  348
  362
  376
  392
  408
  425
  442
  461
  481
  502
  523
  546
Maintenance CAPEX, $m
  -58
  -59
  -61
  -62
  -64
  -66
  -68
  -70
  -73
  -75
  -78
  -81
  -85
  -88
  -92
  -96
  -100
  -105
  -109
  -114
  -119
  -125
  -131
  -137
  -143
  -150
  -157
  -165
  -173
  -181
New CAPEX, $m
  -9
  -12
  -13
  -15
  -17
  -18
  -20
  -22
  -23
  -25
  -27
  -28
  -30
  -32
  -34
  -36
  -38
  -40
  -43
  -45
  -48
  -50
  -53
  -56
  -59
  -62
  -65
  -68
  -72
  -76
Cash from investing activities, $m
  -67
  -71
  -74
  -77
  -81
  -84
  -88
  -92
  -96
  -100
  -105
  -109
  -115
  -120
  -126
  -132
  -138
  -145
  -152
  -159
  -167
  -175
  -184
  -193
  -202
  -212
  -222
  -233
  -245
  -257
Free cash flow, $m
  140
  141
  142
  144
  146
  148
  150
  153
  156
  160
  157
  161
  165
  169
  174
  179
  185
  190
  196
  203
  209
  216
  224
  232
  240
  249
  258
  268
  278
  289
Issuance/(repayment) of debt, $m
  39
  45
  52
  58
  65
  71
  77
  83
  90
  96
  103
  110
  117
  125
  132
  140
  148
  157
  166
  175
  185
  195
  205
  216
  228
  240
  252
  266
  279
  294
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  
  39
  45
  52
  58
  65
  71
  77
  83
  90
  96
  103
  110
  117
  125
  132
  140
  148
  157
  166
  175
  185
  195
  205
  216
  228
  240
  252
  266
  279
  294
Total cash flow (excl. dividends), $m
  179
  186
  194
  202
  210
  219
  228
  237
  246
  256
  260
  271
  282
  294
  306
  319
  333
  347
  362
  378
  394
  411
  429
  448
  468
  489
  511
  534
  558
  583
Retained Cash Flow (-), $m
  -9
  -10
  -11
  -13
  -14
  -15
  -17
  -18
  -20
  -21
  -22
  -24
  -26
  -27
  -29
  -31
  -32
  -34
  -36
  -38
  -40
  -42
  -45
  -47
  -50
  -52
  -55
  -58
  -61
  -64
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
  170
  176
  183
  189
  196
  203
  211
  219
  227
  235
  238
  247
  257
  267
  278
  289
  300
  313
  326
  339
  354
  369
  384
  401
  418
  436
  456
  476
  497
  519
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
  163
  161
  159
  156
  152
  148
  142
  137
  130
  123
  113
  105
  98
  90
  81
  73
  65
  58
  50
  43
  37
  31
  25
  20
  16
  13
  10
  7
  5
  4
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

Aerojet Rocketdyne Holdings, Inc. designs, develops, manufactures, and sells aerospace and defense products and systems in the United States. The company operates in two segments, Aerospace and Defense, and Real Estate. The Aerospace and Defense segment offers aerospace and defense products and systems for the U.S. government, including the Department of Defense, the National Aeronautics and Space Administration, and aerospace and defense prime contractors, as well as for the commercial sector. This segment also offers propulsion systems, such as liquid, solid, air-breathing, and electric types of launch propulsion, in-space propulsion, missile defense propulsion, tactical missile propulsion, and hypersonic propulsion systems for defense and space applications; and armament systems for precision tactical systems and munitions serving military, civil, and commercial customers. The Real Estate segment engages in the re-zoning, entitlement, sale, and leasing of the company’s excess real estate assets. It owns approximately 11,500 acres of land adjacent to U.S. Highway 50 between Rancho Cordova and Folsom, California east of Sacramento. The company was formerly known as GenCorp Inc. and changed its name to Aerojet Rocketdyne Holdings, Inc. in April 2015. Aerojet Rocketdyne Holdings, Inc. was founded in 1915 and is headquartered in El Segundo, California.

FINANCIAL RATIOS  of  Aerojet Rocketdyne Holdings, Inc. (AJRD)

Valuation Ratios
P/E Ratio 0
Price to Sales 0
Price to Book 0
Price to Tangible Book
Price to Cash Flow 0
Price to Free Cash Flow 0
Growth Rates
Sales Growth Rate -100%
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 NaN
LT Debt to Equity 0%
Total Debt to Equity 0%
Interest Coverage 0
Management Effectiveness
Return On Assets 0%
Ret/ On Assets - 3 Yr. Avg. 0%
Return On Total Capital 0%
Ret/ On T. Cap. - 3 Yr. Avg. 0%
Return On Equity 0%
Return On Equity - 3 Yr. Avg. 0%
Asset Turnover 0
Profitability Ratios
Gross Margin 0%
Gross Margin - 3 Yr. Avg. 0%
EBITDA Margin 0%
EBITDA Margin - 3 Yr. Avg. 0%
Operating Margin 0%
Oper. Margin - 3 Yr. Avg. 0%
Pre-Tax Margin 0%
Pre-Tax Margin - 3 Yr. Avg. 0%
Net Profit Margin 0%
Net Profit Margin - 3 Yr. Avg. 0%
Effective Tax Rate 0%
Eff/ Tax Rate - 3 Yr. Avg. 0%
Payout Ratio 0%

AJRD stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the AJRD stock intrinsic value calculation we used $1896 million for the last fiscal year's total revenue generated by Aerojet Rocketdyne Holdings, Inc.. The default revenue input number comes from 0001 income statement of Aerojet Rocketdyne Holdings, 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 AJRD 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 AJRD is calculated based on our internal credit rating of Aerojet Rocketdyne Holdings, 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 Aerojet Rocketdyne Holdings, 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 AJRD stock the variable cost ratio is equal to 89.6%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $-1 million in the base year in the intrinsic value calculation for AJRD 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 5.5% for Aerojet Rocketdyne Holdings, Inc..

Corporate tax rate of 27% is the nominal tax rate for Aerojet Rocketdyne Holdings, 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 AJRD 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 AJRD are equal to 26.3%.

Life of production assets of 8.6 years is the average useful life of capital assets used in Aerojet Rocketdyne Holdings, 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 AJRD is equal to -5.9%. 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 - $421.3 million for Aerojet Rocketdyne Holdings, 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 78.356 million for Aerojet Rocketdyne Holdings, 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 Aerojet Rocketdyne Holdings, Inc. at the current share price and the inputted number of shares is $2.5 billion.

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