Intrinsic value of ASV Holdings, Inc. - ASV

Previous Close

$7.05

  Intrinsic Value

$1.32

stock screener

  Rating & Target

str. sell

-81%

Previous close

$7.05

 
Intrinsic value

$1.32

 
Up/down potential

-81%

 
Rating

str. sell

We calculate the intrinsic value of ASV 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 0.1

 

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, %
  7.00
  6.80
  6.62
  6.46
  6.31
  6.18
  6.06
  5.96
  5.86
  5.77
  5.70
  5.63
  5.56
  5.51
  5.46
  5.41
  5.37
  5.33
  5.30
  5.27
  5.24
  5.22
  5.20
  5.18
  5.16
  5.14
  5.13
  5.12
  5.10
  5.09
Revenue, $m
  132
  141
  150
  160
  170
  180
  191
  202
  214
  227
  240
  253
  267
  282
  297
  313
  330
  348
  366
  385
  406
  427
  449
  472
  497
  522
  549
  577
  606
  637
Variable operating expenses, $m
  124
  132
  141
  150
  159
  169
  179
  190
  201
  213
  223
  236
  249
  263
  277
  292
  308
  324
  341
  359
  378
  398
  418
  440
  463
  486
  511
  538
  565
  594
Fixed operating expenses, $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 operating expenses, $m
  124
  132
  141
  150
  159
  169
  179
  190
  201
  213
  223
  236
  249
  263
  277
  292
  308
  324
  341
  359
  378
  398
  418
  440
  463
  486
  511
  538
  565
  594
Operating income, $m
  8
  8
  9
  10
  10
  11
  12
  12
  13
  14
  16
  17
  18
  19
  20
  21
  23
  24
  25
  26
  28
  29
  31
  32
  34
  36
  38
  39
  41
  44
EBITDA, $m
  12
  13
  14
  15
  16
  17
  18
  19
  20
  21
  22
  23
  25
  26
  27
  29
  30
  32
  34
  35
  37
  39
  41
  43
  46
  48
  51
  53
  56
  59
Interest expense (income), $m
  4
  2
  3
  3
  3
  4
  4
  4
  5
  5
  5
  6
  6
  7
  7
  8
  8
  9
  9
  10
  10
  11
  12
  13
  13
  14
  15
  16
  17
  18
  19
Earnings before tax, $m
  5
  6
  6
  6
  7
  7
  7
  8
  8
  9
  11
  11
  12
  12
  13
  13
  14
  15
  15
  16
  17
  17
  18
  19
  20
  21
  22
  23
  24
  25
Tax expense, $m
  1
  2
  2
  2
  2
  2
  2
  2
  2
  2
  3
  3
  3
  3
  3
  4
  4
  4
  4
  4
  4
  5
  5
  5
  5
  6
  6
  6
  6
  7
Net income, $m
  4
  4
  4
  5
  5
  5
  5
  6
  6
  6
  8
  8
  8
  9
  9
  10
  10
  11
  11
  12
  12
  13
  13
  14
  15
  15
  16
  17
  17
  18

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
  123
  132
  140
  149
  159
  169
  179
  190
  201
  212
  224
  237
  250
  264
  278
  293
  309
  326
  343
  361
  380
  400
  420
  442
  465
  489
  514
  540
  568
  597
Adjusted assets (=assets-cash), $m
  123
  132
  140
  149
  159
  169
  179
  190
  201
  212
  224
  237
  250
  264
  278
  293
  309
  326
  343
  361
  380
  400
  420
  442
  465
  489
  514
  540
  568
  597
Revenue / Adjusted assets
  1.073
  1.068
  1.071
  1.074
  1.069
  1.065
  1.067
  1.063
  1.065
  1.071
  1.071
  1.068
  1.068
  1.068
  1.068
  1.068
  1.068
  1.067
  1.067
  1.066
  1.068
  1.068
  1.069
  1.068
  1.069
  1.067
  1.068
  1.069
  1.067
  1.067
Average production assets, $m
  45
  48
  51
  55
  58
  62
  66
  69
  73
  78
  82
  87
  92
  97
  102
  107
  113
  119
  126
  132
  139
  146
  154
  162
  170
  179
  188
  198
  208
  219
Working capital, $m
  27
  29
  31
  33
  35
  37
  39
  41
  44
  46
  49
  52
  54
  57
  61
  64
  67
  71
  75
  79
  83
  87
  92
  96
  101
  107
  112
  118
  124
  130
Total debt, $m
  31
  34
  38
  42
  46
  50
  54
  59
  64
  69
  74
  79
  85
  91
  97
  103
  110
  117
  125
  132
  140
  149
  158
  167
  177
  187
  198
  209
  221
  233
Total liabilities, $m
  53
  56
  60
  64
  68
  72
  77
  81
  86
  91
  96
  101
  107
  113
  119
  126
  132
  139
  147
  154
  163
  171
  180
  189
  199
  209
  220
  231
  243
  255
Total equity, $m
  70
  75
  80
  85
  91
  96
  102
  108
  115
  121
  128
  136
  143
  151
  159
  168
  177
  186
  196
  206
  217
  229
  240
  253
  266
  280
  294
  309
  325
  341
Total liabilities and equity, $m
  123
  131
  140
  149
  159
  168
  179
  189
  201
  212
  224
  237
  250
  264
  278
  294
  309
  325
  343
  360
  380
  400
  420
  442
  465
  489
  514
  540
  568
  596
Debt-to-equity ratio
  0.430
  0.450
  0.470
  0.490
  0.500
  0.520
  0.530
  0.540
  0.560
  0.570
  0.580
  0.580
  0.590
  0.600
  0.610
  0.620
  0.620
  0.630
  0.640
  0.640
  0.650
  0.650
  0.660
  0.660
  0.660
  0.670
  0.670
  0.680
  0.680
  0.680
Adjusted equity ratio
  0.572
  0.572
  0.572
  0.572
  0.572
  0.572
  0.572
  0.572
  0.572
  0.572
  0.572
  0.572
  0.572
  0.572
  0.572
  0.572
  0.572
  0.572
  0.572
  0.572
  0.572
  0.572
  0.572
  0.572
  0.572
  0.572
  0.572
  0.572
  0.572
  0.572

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  4
  4
  4
  5
  5
  5
  5
  6
  6
  6
  8
  8
  8
  9
  9
  10
  10
  11
  11
  12
  12
  13
  13
  14
  15
  15
  16
  17
  17
  18
Depreciation, amort., depletion, $m
  5
  5
  5
  5
  5
  6
  6
  6
  6
  7
  6
  6
  6
  7
  7
  7
  8
  8
  9
  9
  10
  10
  11
  11
  12
  12
  13
  14
  14
  15
Funds from operations, $m
  8
  9
  9
  10
  10
  11
  11
  12
  13
  13
  13
  14
  15
  16
  16
  17
  18
  19
  20
  21
  22
  23
  24
  25
  26
  28
  29
  30
  32
  33
Change in working capital, $m
  2
  2
  2
  2
  2
  2
  2
  2
  2
  3
  3
  3
  3
  3
  3
  3
  3
  4
  4
  4
  4
  4
  5
  5
  5
  5
  5
  6
  6
  6
Cash from operations, $m
  7
  7
  7
  8
  8
  9
  9
  10
  10
  11
  11
  11
  12
  13
  13
  14
  15
  15
  16
  17
  18
  18
  19
  20
  21
  22
  23
  25
  26
  27
Maintenance CAPEX, $m
  -3
  -3
  -3
  -4
  -4
  -4
  -4
  -5
  -5
  -5
  -5
  -6
  -6
  -6
  -7
  -7
  -7
  -8
  -8
  -9
  -9
  -10
  -10
  -11
  -11
  -12
  -12
  -13
  -14
  -14
New CAPEX, $m
  -3
  -3
  -3
  -3
  -3
  -4
  -4
  -4
  -4
  -4
  -4
  -5
  -5
  -5
  -5
  -6
  -6
  -6
  -6
  -7
  -7
  -7
  -8
  -8
  -8
  -9
  -9
  -10
  -10
  -11
Cash from investing activities, $m
  -6
  -6
  -6
  -7
  -7
  -8
  -8
  -9
  -9
  -9
  -9
  -11
  -11
  -11
  -12
  -13
  -13
  -14
  -14
  -16
  -16
  -17
  -18
  -19
  -19
  -21
  -21
  -23
  -24
  -25
Free cash flow, $m
  1
  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
Issuance/(repayment) of debt, $m
  3
  4
  4
  4
  4
  4
  4
  5
  5
  5
  5
  5
  6
  6
  6
  6
  7
  7
  7
  8
  8
  8
  9
  9
  10
  10
  11
  11
  12
  12
Issuance/(repurchase) of shares, $m
  1
  1
  1
  1
  1
  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  
  4
  5
  5
  5
  5
  4
  4
  5
  5
  5
  5
  5
  6
  6
  6
  6
  7
  7
  7
  8
  8
  8
  9
  9
  10
  10
  11
  11
  12
  12
Total cash flow (excl. dividends), $m
  5
  5
  5
  5
  6
  6
  6
  6
  6
  7
  6
  6
  7
  7
  7
  8
  8
  8
  9
  9
  10
  10
  11
  11
  12
  12
  13
  13
  14
  14
Retained Cash Flow (-), $m
  -5
  -5
  -5
  -5
  -5
  -6
  -6
  -6
  -6
  -7
  -7
  -7
  -8
  -8
  -8
  -9
  -9
  -9
  -10
  -10
  -11
  -11
  -12
  -12
  -13
  -14
  -14
  -15
  -16
  -17
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
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -2
  -2
  -2
  -2
  -2
Discount rate, %
  5.70
  5.99
  6.28
  6.60
  6.93
  7.27
  7.64
  8.02
  8.42
  8.84
  9.28
  9.75
  10.24
  10.75
  11.29
  11.85
  12.44
  13.06
  13.72
  14.40
  15.12
  15.88
  16.67
  17.51
  18.38
  19.30
  20.27
  21.28
  22.34
  23.46
PV of cash for 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
Current shareholders' claim on cash, %
  98.9
  98.0
  97.2
  96.6
  96.0
  95.6
  95.2
  94.9
  94.6
  94.4
  94.4
  94.4
  94.4
  94.4
  94.4
  94.4
  94.4
  94.4
  94.4
  94.4
  94.4
  94.4
  94.4
  94.4
  94.4
  94.4
  94.4
  94.4
  94.4
  94.4

ASV Holdings, Inc. (ASV) is engaged in designing and manufacturing a range of compact track loader (CTL) and skid steer loader (SSL) equipment for construction, agricultural and forestry industries. The Company manufactures Posi-Track, rubber-tracked CTLs with multi-level suspension. CTLs are compact tracked vehicles with lift arms that functions in wet, muddy, snowy or harsh conditions and where there are slopes and grades, such as in a construction, agriculture or forestry environment. SSLs are wheeled vehicles with lift arms that can be outfitted with the same attachments as CTLs and can therefore be used in the same applications. The Company also serves as a private label original equipment manufacturer (OEM) for several manufacturers. It provides pre- and post-sale dealer support, after-sale technical support and replacement parts. The Company markets through a distribution network in North America, Australia and New Zealand under the ASV and Terex brands.

FINANCIAL RATIOS  of  ASV Holdings, Inc. (ASV)

Valuation Ratios
P/E Ratio -69.1
Price to Sales 0.7
Price to Book 1.3
Price to Tangible Book
Price to Cash Flow 34.5
Price to Free Cash Flow 34.5
Growth Rates
Sales Growth Rate -11.1%
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 0
LT Debt to Equity 30.2%
Total Debt to Equity 30.2%
Interest Coverage 1
Management Effectiveness
Return On Assets 2.5%
Ret/ On Assets - 3 Yr. Avg. 3.6%
Return On Total Capital -1.5%
Ret/ On T. Cap. - 3 Yr. Avg. -0.5%
Return On Equity -1.9%
Return On Equity - 3 Yr. Avg. -0.6%
Asset Turnover 0.9
Profitability Ratios
Gross Margin 15.4%
Gross Margin - 3 Yr. Avg. 10%
EBITDA Margin 7.7%
EBITDA Margin - 3 Yr. Avg. 5.4%
Operating Margin 3.8%
Oper. Margin - 3 Yr. Avg. 3%
Pre-Tax Margin -1%
Pre-Tax Margin - 3 Yr. Avg. -0.3%
Net Profit Margin -1%
Net Profit Margin - 3 Yr. Avg. -0.3%
Effective Tax Rate 0%
Eff/ Tax Rate - 3 Yr. Avg. 0%
Payout Ratio 0%

ASV stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the ASV stock intrinsic value calculation we used $123 million for the last fiscal year's total revenue generated by ASV Holdings, Inc.. The default revenue input number comes from 0001 income statement of ASV 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 ASV stock valuation model: a) initial revenue growth rate of 7% 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 5.7%, whose default value for ASV is calculated based on our internal credit rating of ASV 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 ASV 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 ASV stock the variable cost ratio is equal to 94.3%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $0 million in the base year in the intrinsic value calculation for ASV 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 8.4% for ASV Holdings, Inc..

Corporate tax rate of 27% is the nominal tax rate for ASV 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 ASV 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 ASV are equal to 34.3%.

Life of production assets of 14.5 years is the average useful life of capital assets used in ASV 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 ASV is equal to 20.4%. 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 - $65.801 million for ASV 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 9.834 million for ASV 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 ASV Holdings, Inc. at the current share price and the inputted number of shares is $0.1 billion.

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