Intrinsic value of Allied Motion Technologies, Inc. - AMOT

Previous Close

$34.72

  Intrinsic Value

$16.79

stock screener

  Rating & Target

str. sell

-52%

Previous close

$34.72

 
Intrinsic value

$16.79

 
Up/down potential

-52%

 
Rating

str. sell

We calculate the intrinsic value of AMOT 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 0.3

 

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, %
  13.20
  12.38
  11.64
  10.98
  10.38
  9.84
  9.36
  8.92
  8.53
  8.18
  7.86
  7.57
  7.32
  7.08
  6.88
  6.69
  6.52
  6.37
  6.23
  6.11
  6.00
  5.90
  5.81
  5.73
  5.65
  5.59
  5.53
  5.48
  5.43
  5.39
Revenue, $m
  352
  396
  442
  490
  541
  594
  650
  708
  768
  831
  896
  964
  1,035
  1,108
  1,184
  1,264
  1,346
  1,432
  1,521
  1,614
  1,711
  1,811
  1,917
  2,026
  2,141
  2,261
  2,386
  2,516
  2,653
  2,796
Variable operating expenses, $m
  323
  363
  404
  448
  494
  542
  593
  645
  700
  757
  811
  872
  936
  1,002
  1,071
  1,143
  1,218
  1,295
  1,376
  1,460
  1,547
  1,639
  1,734
  1,833
  1,937
  2,045
  2,158
  2,276
  2,400
  2,529
Fixed operating expenses, $m
  2
  2
  2
  2
  2
  2
  2
  2
  2
  2
  3
  3
  3
  3
  3
  3
  3
  3
  3
  3
  3
  3
  3
  3
  3
  4
  4
  4
  4
  4
Total operating expenses, $m
  325
  365
  406
  450
  496
  544
  595
  647
  702
  759
  814
  875
  939
  1,005
  1,074
  1,146
  1,221
  1,298
  1,379
  1,463
  1,550
  1,642
  1,737
  1,836
  1,940
  2,049
  2,162
  2,280
  2,404
  2,533
Operating income, $m
  27
  31
  35
  40
  45
  50
  55
  60
  66
  72
  83
  89
  96
  103
  110
  118
  126
  134
  142
  151
  160
  170
  180
  190
  201
  212
  224
  236
  249
  263
EBITDA, $m
  40
  45
  51
  57
  63
  69
  76
  83
  90
  97
  105
  113
  122
  130
  139
  149
  159
  169
  180
  191
  202
  214
  227
  240
  254
  268
  283
  299
  315
  332
Interest expense (income), $m
  5
  7
  8
  9
  11
  12
  14
  16
  17
  19
  21
  23
  25
  27
  30
  32
  34
  37
  40
  42
  45
  48
  51
  54
  58
  61
  65
  69
  73
  77
  81
Earnings before tax, $m
  20
  23
  26
  29
  32
  36
  39
  43
  47
  51
  60
  64
  69
  73
  78
  83
  89
  94
  100
  106
  112
  118
  125
  132
  140
  147
  155
  164
  173
  182
Tax expense, $m
  5
  6
  7
  8
  9
  10
  11
  12
  13
  14
  16
  17
  19
  20
  21
  22
  24
  25
  27
  29
  30
  32
  34
  36
  38
  40
  42
  44
  47
  49
Net income, $m
  15
  17
  19
  21
  24
  26
  29
  31
  34
  37
  44
  47
  50
  54
  57
  61
  65
  69
  73
  77
  82
  86
  91
  97
  102
  108
  113
  120
  126
  133

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
  323
  363
  405
  450
  496
  545
  596
  649
  705
  763
  822
  885
  949
  1,017
  1,087
  1,159
  1,235
  1,313
  1,395
  1,481
  1,569
  1,662
  1,758
  1,859
  1,964
  2,074
  2,189
  2,309
  2,434
  2,565
Adjusted assets (=assets-cash), $m
  323
  363
  405
  450
  496
  545
  596
  649
  705
  763
  822
  885
  949
  1,017
  1,087
  1,159
  1,235
  1,313
  1,395
  1,481
  1,569
  1,662
  1,758
  1,859
  1,964
  2,074
  2,189
  2,309
  2,434
  2,565
Revenue / Adjusted assets
  1.090
  1.091
  1.091
  1.089
  1.091
  1.090
  1.091
  1.091
  1.089
  1.089
  1.090
  1.089
  1.091
  1.089
  1.089
  1.091
  1.090
  1.091
  1.090
  1.090
  1.091
  1.090
  1.090
  1.090
  1.090
  1.090
  1.090
  1.090
  1.090
  1.090
Average production assets, $m
  101
  113
  126
  140
  155
  170
  186
  202
  220
  238
  256
  276
  296
  317
  339
  361
  385
  409
  435
  462
  489
  518
  548
  580
  612
  647
  682
  720
  759
  800
Working capital, $m
  65
  73
  82
  91
  100
  110
  120
  131
  142
  154
  166
  178
  191
  205
  219
  234
  249
  265
  281
  299
  316
  335
  355
  375
  396
  418
  441
  466
  491
  517
Total debt, $m
  147
  172
  200
  228
  258
  290
  322
  357
  392
  429
  468
  508
  550
  593
  638
  684
  733
  784
  836
  891
  948
  1,008
  1,070
  1,134
  1,202
  1,273
  1,346
  1,423
  1,504
  1,588
Total liabilities, $m
  208
  233
  261
  289
  319
  351
  383
  418
  453
  490
  529
  569
  610
  654
  699
  745
  794
  845
  897
  952
  1,009
  1,069
  1,131
  1,195
  1,263
  1,334
  1,407
  1,484
  1,565
  1,649
Total equity, $m
  115
  130
  145
  161
  177
  195
  213
  232
  252
  272
  294
  316
  339
  363
  388
  414
  441
  469
  498
  529
  560
  593
  628
  664
  701
  740
  781
  824
  869
  916
Total liabilities and equity, $m
  323
  363
  406
  450
  496
  546
  596
  650
  705
  762
  823
  885
  949
  1,017
  1,087
  1,159
  1,235
  1,314
  1,395
  1,481
  1,569
  1,662
  1,759
  1,859
  1,964
  2,074
  2,188
  2,308
  2,434
  2,565
Debt-to-equity ratio
  1.270
  1.330
  1.380
  1.420
  1.460
  1.490
  1.510
  1.540
  1.560
  1.580
  1.590
  1.610
  1.620
  1.630
  1.640
  1.650
  1.660
  1.670
  1.680
  1.690
  1.690
  1.700
  1.700
  1.710
  1.710
  1.720
  1.720
  1.730
  1.730
  1.730
Adjusted equity ratio
  0.357
  0.357
  0.357
  0.357
  0.357
  0.357
  0.357
  0.357
  0.357
  0.357
  0.357
  0.357
  0.357
  0.357
  0.357
  0.357
  0.357
  0.357
  0.357
  0.357
  0.357
  0.357
  0.357
  0.357
  0.357
  0.357
  0.357
  0.357
  0.357
  0.357

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  15
  17
  19
  21
  24
  26
  29
  31
  34
  37
  44
  47
  50
  54
  57
  61
  65
  69
  73
  77
  82
  86
  91
  97
  102
  108
  113
  120
  126
  133
Depreciation, amort., depletion, $m
  13
  15
  16
  17
  18
  19
  21
  22
  24
  25
  22
  24
  26
  27
  29
  31
  33
  35
  37
  40
  42
  45
  47
  50
  53
  56
  59
  62
  65
  69
Funds from operations, $m
  28
  31
  35
  38
  42
  46
  49
  54
  58
  62
  66
  71
  76
  81
  86
  92
  98
  104
  110
  117
  124
  131
  139
  147
  155
  163
  172
  182
  191
  202
Change in working capital, $m
  8
  8
  9
  9
  9
  10
  10
  11
  11
  12
  12
  13
  13
  14
  14
  15
  15
  16
  17
  17
  18
  19
  19
  20
  21
  22
  23
  24
  25
  26
Cash from operations, $m
  21
  23
  26
  29
  32
  36
  39
  43
  47
  51
  54
  58
  63
  67
  72
  77
  83
  88
  94
  100
  106
  112
  119
  126
  134
  141
  149
  157
  166
  175
Maintenance CAPEX, $m
  -8
  -9
  -10
  -11
  -12
  -13
  -15
  -16
  -17
  -19
  -20
  -22
  -24
  -26
  -27
  -29
  -31
  -33
  -35
  -37
  -40
  -42
  -45
  -47
  -50
  -53
  -56
  -59
  -62
  -65
New CAPEX, $m
  -12
  -12
  -13
  -14
  -15
  -15
  -16
  -17
  -17
  -18
  -19
  -19
  -20
  -21
  -22
  -23
  -24
  -25
  -26
  -27
  -28
  -29
  -30
  -31
  -33
  -34
  -36
  -37
  -39
  -41
Cash from investing activities, $m
  -20
  -21
  -23
  -25
  -27
  -28
  -31
  -33
  -34
  -37
  -39
  -41
  -44
  -47
  -49
  -52
  -55
  -58
  -61
  -64
  -68
  -71
  -75
  -78
  -83
  -87
  -92
  -96
  -101
  -106
Free cash flow, $m
  1
  2
  3
  4
  6
  7
  9
  10
  12
  14
  15
  17
  19
  21
  23
  25
  28
  30
  33
  36
  39
  41
  44
  48
  51
  54
  58
  61
  65
  69
Issuance/(repayment) of debt, $m
  24
  26
  27
  29
  30
  31
  33
  34
  36
  37
  39
  40
  42
  43
  45
  47
  49
  51
  53
  55
  57
  60
  62
  65
  68
  71
  74
  77
  81
  84
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  
  24
  26
  27
  29
  30
  31
  33
  34
  36
  37
  39
  40
  42
  43
  45
  47
  49
  51
  53
  55
  57
  60
  62
  65
  68
  71
  74
  77
  81
  84
Total cash flow (excl. dividends), $m
  25
  28
  30
  33
  36
  39
  41
  44
  48
  51
  53
  57
  60
  64
  68
  72
  77
  81
  86
  91
  96
  101
  107
  112
  118
  125
  131
  138
  146
  153
Retained Cash Flow (-), $m
  -13
  -14
  -15
  -16
  -17
  -17
  -18
  -19
  -20
  -21
  -21
  -22
  -23
  -24
  -25
  -26
  -27
  -28
  -29
  -30
  -32
  -33
  -34
  -36
  -38
  -39
  -41
  -43
  -45
  -47
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
  12
  14
  15
  17
  19
  21
  23
  25
  28
  30
  32
  34
  37
  40
  43
  46
  50
  53
  56
  60
  64
  68
  72
  76
  81
  86
  90
  96
  101
  106
Discount rate, %
  8.10
  8.51
  8.93
  9.38
  9.85
  10.34
  10.85
  11.40
  11.97
  12.57
  13.19
  13.85
  14.55
  15.27
  16.04
  16.84
  17.68
  18.57
  19.49
  20.47
  21.49
  22.57
  23.69
  24.88
  26.12
  27.43
  28.80
  30.24
  31.75
  33.34
PV of cash for distribution, $m
  11
  11
  12
  12
  12
  12
  11
  11
  10
  9
  8
  7
  6
  5
  5
  4
  3
  2
  2
  1
  1
  1
  1
  0
  0
  0
  0
  0
  0
  0
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
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Allied Motion Technologies Inc. designs, manufactures and sells precision and specialty motion control components and systems used in a range of industries. The Company serves various markets, including vehicle, medical, aerospace and defense, electronics and industrial. It focuses on motion control applications. It is engaged in developing electro-magnetic, mechanical and electronic motion technology. It operates in the design and manufacture of motion control products, marketed to original equipment manufacturers and end users segment. Its products are used in the handling, inspection, and testing of components and final products, such as printers, tunable lasers and spectrum analyzers for the fiber optic industry, and test and processing equipment for the semiconductor manufacturing industry. Its products are used in a range of medical, industrial and commercial aviation applications, such as dialysis equipment, industrial ink jet printers and cash dispensers.

FINANCIAL RATIOS  of  Allied Motion Technologies, Inc. (AMOT)

Valuation Ratios
P/E Ratio 36.1
Price to Sales 1.3
Price to Book 4.5
Price to Tangible Book
Price to Cash Flow 23.2
Price to Free Cash Flow 36.1
Growth Rates
Sales Growth Rate 6%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate 0%
Cap. Spend. - 3 Yr. Gr. Rate 10.8%
Financial Strength
Quick Ratio 15
Current Ratio 0
LT Debt to Equity 97.2%
Total Debt to Equity 98.6%
Interest Coverage 4
Management Effectiveness
Return On Assets 7.3%
Ret/ On Assets - 3 Yr. Avg. 9.2%
Return On Total Capital 6.5%
Ret/ On T. Cap. - 3 Yr. Avg. 8.5%
Return On Equity 13.1%
Return On Equity - 3 Yr. Avg. 19.4%
Asset Turnover 1.4
Profitability Ratios
Gross Margin 29.7%
Gross Margin - 3 Yr. Avg. 29.5%
EBITDA Margin 11.4%
EBITDA Margin - 3 Yr. Avg. 12.1%
Operating Margin 7.7%
Oper. Margin - 3 Yr. Avg. 8.6%
Pre-Tax Margin 5.3%
Pre-Tax Margin - 3 Yr. Avg. 6.5%
Net Profit Margin 3.7%
Net Profit Margin - 3 Yr. Avg. 4.7%
Effective Tax Rate 30.8%
Eff/ Tax Rate - 3 Yr. Avg. 27.9%
Payout Ratio 11.1%

AMOT stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the AMOT stock intrinsic value calculation we used $311 million for the last fiscal year's total revenue generated by Allied Motion Technologies, Inc.. The default revenue input number comes from 0001 income statement of Allied Motion 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 AMOT stock valuation model: a) initial revenue growth rate of 13.2% 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 8.1%, whose default value for AMOT is calculated based on our internal credit rating of Allied Motion 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 Allied Motion 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 AMOT stock the variable cost ratio is equal to 92%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $2 million in the base year in the intrinsic value calculation for AMOT 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 5.4% for Allied Motion Technologies, Inc..

Corporate tax rate of 27% is the nominal tax rate for Allied Motion 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 AMOT 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 AMOT are equal to 28.6%.

Life of production assets of 11.6 years is the average useful life of capital assets used in Allied Motion 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 AMOT is equal to 18.5%. 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 - $101.813 million for Allied Motion 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 9.476 million for Allied Motion 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 Allied Motion Technologies, Inc. at the current share price and the inputted number of shares is $0.3 billion.

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