Intrinsic value of Amtech Systems - ASYS

Previous Close

$5.24

  Intrinsic Value

$10.02

stock screener

  Rating & Target

str. buy

+91%

Previous close

$5.24

 
Intrinsic value

$10.02

 
Up/down potential

+91%

 
Rating

str. buy

We calculate the intrinsic value of ASYS 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, %
  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
  168
  172
  176
  181
  187
  193
  199
  206
  214
  222
  231
  240
  250
  261
  272
  284
  297
  310
  324
  339
  355
  371
  389
  407
  426
  447
  468
  491
  515
  540
Variable operating expenses, $m
  107
  109
  112
  115
  118
  122
  126
  131
  136
  141
  145
  151
  157
  163
  171
  178
  186
  194
  203
  212
  222
  233
  244
  255
  267
  280
  294
  308
  323
  338
Fixed operating expenses, $m
  51
  52
  53
  55
  56
  57
  58
  60
  61
  62
  64
  65
  66
  68
  69
  71
  72
  74
  76
  77
  79
  81
  82
  84
  86
  88
  90
  92
  94
  96
Total operating expenses, $m
  158
  161
  165
  170
  174
  179
  184
  191
  197
  203
  209
  216
  223
  231
  240
  249
  258
  268
  279
  289
  301
  314
  326
  339
  353
  368
  384
  400
  417
  434
Operating income, $m
  10
  10
  11
  11
  12
  13
  15
  16
  17
  19
  23
  25
  27
  29
  32
  35
  38
  42
  45
  49
  53
  58
  63
  68
  73
  79
  85
  91
  98
  105
EBITDA, $m
  13
  14
  14
  15
  16
  17
  18
  20
  21
  23
  25
  27
  30
  32
  35
  38
  42
  45
  49
  53
  57
  62
  67
  72
  78
  84
  90
  97
  104
  111
Interest expense (income), $m
  0
  0
  1
  1
  1
  1
  1
  1
  2
  2
  2
  2
  3
  3
  3
  4
  4
  4
  5
  5
  6
  6
  7
  7
  8
  8
  9
  10
  11
  11
  12
Earnings before tax, $m
  10
  10
  10
  11
  11
  12
  13
  14
  16
  17
  20
  22
  24
  26
  29
  31
  34
  37
  40
  43
  47
  51
  55
  60
  64
  70
  75
  81
  87
  93
Tax expense, $m
  3
  3
  3
  3
  3
  3
  4
  4
  4
  5
  5
  6
  6
  7
  8
  8
  9
  10
  11
  12
  13
  14
  15
  16
  17
  19
  20
  22
  23
  25
Net income, $m
  7
  7
  7
  8
  8
  9
  10
  10
  11
  12
  15
  16
  18
  19
  21
  23
  25
  27
  29
  32
  34
  37
  40
  44
  47
  51
  55
  59
  63
  68

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
  195
  199
  205
  210
  217
  224
  231
  239
  248
  258
  268
  279
  291
  303
  316
  330
  344
  360
  376
  394
  412
  431
  451
  473
  495
  519
  544
  570
  598
  627
Adjusted assets (=assets-cash), $m
  195
  199
  205
  210
  217
  224
  231
  239
  248
  258
  268
  279
  291
  303
  316
  330
  344
  360
  376
  394
  412
  431
  451
  473
  495
  519
  544
  570
  598
  627
Revenue / Adjusted assets
  0.862
  0.864
  0.859
  0.862
  0.862
  0.862
  0.861
  0.862
  0.863
  0.860
  0.862
  0.860
  0.859
  0.861
  0.861
  0.861
  0.863
  0.861
  0.862
  0.860
  0.862
  0.861
  0.863
  0.860
  0.861
  0.861
  0.860
  0.861
  0.861
  0.861
Average production assets, $m
  24
  24
  25
  26
  26
  27
  28
  29
  30
  32
  33
  34
  36
  37
  39
  40
  42
  44
  46
  48
  50
  53
  55
  58
  61
  63
  66
  70
  73
  77
Working capital, $m
  -4
  -4
  -5
  -5
  -5
  -5
  -5
  -5
  -6
  -6
  -6
  -6
  -7
  -7
  -7
  -7
  -8
  -8
  -8
  -9
  -9
  -10
  -10
  -11
  -11
  -12
  -12
  -13
  -13
  -14
Total debt, $m
  10
  13
  15
  18
  22
  25
  29
  34
  38
  44
  49
  55
  61
  67
  74
  81
  89
  97
  106
  115
  125
  135
  146
  157
  169
  181
  195
  208
  223
  238
Total liabilities, $m
  103
  105
  108
  111
  114
  118
  122
  126
  131
  136
  142
  147
  153
  160
  167
  174
  182
  190
  199
  208
  217
  228
  238
  250
  261
  274
  287
  301
  316
  331
Total equity, $m
  92
  94
  97
  99
  102
  106
  109
  113
  117
  122
  127
  132
  137
  143
  149
  156
  163
  170
  178
  186
  194
  203
  213
  223
  234
  245
  257
  269
  282
  296
Total liabilities and equity, $m
  195
  199
  205
  210
  216
  224
  231
  239
  248
  258
  269
  279
  290
  303
  316
  330
  345
  360
  377
  394
  411
  431
  451
  473
  495
  519
  544
  570
  598
  627
Debt-to-equity ratio
  0.110
  0.130
  0.160
  0.190
  0.210
  0.240
  0.270
  0.300
  0.330
  0.360
  0.390
  0.420
  0.440
  0.470
  0.500
  0.520
  0.550
  0.570
  0.600
  0.620
  0.640
  0.660
  0.680
  0.700
  0.720
  0.740
  0.760
  0.770
  0.790
  0.810
Adjusted equity ratio
  0.472
  0.472
  0.472
  0.472
  0.472
  0.472
  0.472
  0.472
  0.472
  0.472
  0.472
  0.472
  0.472
  0.472
  0.472
  0.472
  0.472
  0.472
  0.472
  0.472
  0.472
  0.472
  0.472
  0.472
  0.472
  0.472
  0.472
  0.472
  0.472
  0.472

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  7
  7
  7
  8
  8
  9
  10
  10
  11
  12
  15
  16
  18
  19
  21
  23
  25
  27
  29
  32
  34
  37
  40
  44
  47
  51
  55
  59
  63
  68
Depreciation, amort., depletion, $m
  3
  3
  4
  4
  4
  4
  4
  4
  4
  4
  3
  3
  3
  3
  3
  3
  3
  4
  4
  4
  4
  4
  4
  5
  5
  5
  5
  6
  6
  6
Funds from operations, $m
  10
  11
  11
  11
  12
  13
  13
  14
  15
  17
  17
  19
  20
  22
  24
  26
  28
  30
  33
  36
  38
  41
  45
  48
  52
  56
  60
  65
  69
  74
Change in working capital, $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
  -1
  -1
  -1
  -1
  -1
  -1
Cash from operations, $m
  10
  11
  11
  11
  12
  13
  14
  14
  16
  17
  18
  19
  21
  22
  24
  26
  28
  31
  33
  36
  39
  42
  45
  49
  52
  56
  61
  65
  70
  75
Maintenance CAPEX, $m
  -2
  -2
  -2
  -2
  -2
  -2
  -2
  -2
  -2
  -2
  -3
  -3
  -3
  -3
  -3
  -3
  -3
  -3
  -4
  -4
  -4
  -4
  -4
  -4
  -5
  -5
  -5
  -5
  -6
  -6
New CAPEX, $m
  0
  -1
  -1
  -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
  -4
Cash from investing activities, $m
  -2
  -3
  -3
  -3
  -3
  -3
  -3
  -3
  -3
  -3
  -4
  -4
  -4
  -5
  -5
  -5
  -5
  -5
  -6
  -6
  -6
  -6
  -6
  -7
  -8
  -8
  -8
  -8
  -9
  -10
Free cash flow, $m
  8
  8
  8
  9
  9
  10
  10
  11
  12
  13
  14
  15
  16
  18
  20
  21
  23
  25
  28
  30
  33
  36
  38
  42
  45
  49
  52
  57
  61
  65
Issuance/(repayment) of debt, $m
  2
  2
  3
  3
  3
  4
  4
  4
  5
  5
  5
  6
  6
  7
  7
  7
  8
  8
  9
  9
  10
  10
  11
  11
  12
  13
  13
  14
  15
  15
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  
  2
  2
  3
  3
  3
  4
  4
  4
  5
  5
  5
  6
  6
  7
  7
  7
  8
  8
  9
  9
  10
  10
  11
  11
  12
  13
  13
  14
  15
  15
Total cash flow (excl. dividends), $m
  10
  11
  11
  12
  13
  13
  14
  16
  17
  18
  19
  21
  23
  25
  27
  29
  31
  34
  36
  39
  42
  46
  49
  53
  57
  61
  66
  70
  75
  81
Retained Cash Flow (-), $m
  -2
  -2
  -2
  -3
  -3
  -3
  -4
  -4
  -4
  -4
  -5
  -5
  -5
  -6
  -6
  -7
  -7
  -7
  -8
  -8
  -9
  -9
  -10
  -10
  -11
  -11
  -12
  -12
  -13
  -14
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
  8
  8
  9
  9
  10
  10
  11
  12
  13
  14
  14
  16
  17
  19
  20
  22
  24
  26
  29
  31
  34
  37
  40
  43
  46
  50
  54
  58
  62
  67
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
  8
  8
  8
  7
  7
  7
  7
  7
  7
  7
  7
  7
  7
  6
  6
  6
  5
  5
  4
  4
  3
  3
  3
  2
  2
  1
  1
  1
  1
  1
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

Amtech Systems, Inc. is engaged in the manufacture of capital equipment, including thermal processing, silicon wafer handling automation and related consumables used in fabricating solar cells, Light Emitting Diode (LED) and semiconductor devices. The Company operates through three business segments: solar, semiconductor and polishing. The solar segment supplies thermal processing systems, including diffusion; plasma-enhanced chemical vapor deposition (PECVD); atomic layer deposition (ALD), and related automation, parts and services to the solar/photovoltaic industry. The semiconductor segment supplies thermal processing equipment, including solder reflow equipment and related controls for use by the semiconductor manufacturers and in electronics assembly for automotive and other industries. The polishing supplies segment produces consumables and machinery for lapping (fine abrading) and polishing of materials, such as sapphire substrates and optical components.

FINANCIAL RATIOS  of  Amtech Systems (ASYS)

Valuation Ratios
P/E Ratio 8.6
Price to Sales 0.5
Price to Book 0.9
Price to Tangible Book
Price to Cash Flow 6.4
Price to Free Cash Flow 7
Growth Rates
Sales Growth Rate 37.5%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate 0%
Cap. Spend. - 3 Yr. Gr. Rate NaN%
Financial Strength
Quick Ratio NaN
Current Ratio 0.5
LT Debt to Equity 8.9%
Total Debt to Equity 8.9%
Interest Coverage 0
Management Effectiveness
Return On Assets 5.8%
Ret/ On Assets - 3 Yr. Avg. -2.5%
Return On Total Capital 10.3%
Ret/ On T. Cap. - 3 Yr. Avg. -3.4%
Return On Equity 11.5%
Return On Equity - 3 Yr. Avg. -3.7%
Asset Turnover 1.1
Profitability Ratios
Gross Margin 31.5%
Gross Margin - 3 Yr. Avg. 28.5%
EBITDA Margin 7.3%
EBITDA Margin - 3 Yr. Avg. 1.2%
Operating Margin 6.7%
Oper. Margin - 3 Yr. Avg. -4.1%
Pre-Tax Margin 6.1%
Pre-Tax Margin - 3 Yr. Avg. -1%
Net Profit Margin 5.5%
Net Profit Margin - 3 Yr. Avg. -2.7%
Effective Tax Rate 20%
Eff/ Tax Rate - 3 Yr. Avg. -33.3%
Payout Ratio 0%

ASYS stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the ASYS stock intrinsic value calculation we used $164.516 million for the last fiscal year's total revenue generated by Amtech Systems. The default revenue input number comes from 0001 income statement of Amtech Systems. 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 ASYS 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 ASYS is calculated based on our internal credit rating of Amtech Systems, 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 Amtech Systems.
    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 ASYS stock the variable cost ratio is equal to 63.6%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $50 million in the base year in the intrinsic value calculation for ASYS 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 Amtech Systems.

Corporate tax rate of 27% is the nominal tax rate for Amtech Systems. 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 ASYS 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 ASYS are equal to 14.2%.

Life of production assets of 12.4 years is the average useful life of capital assets used in Amtech Systems 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 ASYS is equal to -2.6%. 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 - $90.483 million for Amtech Systems - 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 14.988 million for Amtech Systems 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 Amtech Systems at the current share price and the inputted number of shares is $0.1 billion.

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COMPANY NEWS

▶ Amtech Systems CEO to step down, solar job cuts expected   [06:33PM  American City Business Journals]
▶ Amtech: Fiscal 4Q Earnings Snapshot   [04:45PM  Associated Press]
▶ Does Amtech Systems Incs (NASDAQ:ASYS) PE Ratio Warrant A Buy?   [Oct-04-18 09:51AM  Simply Wall St.]
▶ Amtech Announces New N-Type Solar Technology Order   [Sep-18-18 09:30AM  PR Newswire]
▶ Amtech: Fiscal 3Q Earnings Snapshot   [05:30PM  Associated Press]
▶ 3 Strong Buy Stocks from an Impressive Industry   [May-29-18 04:15PM  Zacks]
▶ Bet on These 5 Stocks with Remarkable Net Profit Margin   [May-18-18 12:00PM  InvestorPlace]
▶ New Strong Buy Stocks for May 14th   [May-14-18 09:48AM  Zacks]
▶ Amtech: Fiscal 2Q Earnings Snapshot   [May-10-18 05:52PM  Associated Press]
▶ Amtech Systems Announces Stock Repurchase Program   [Apr-02-18 08:30AM  PR Newswire]
▶ Amtech posts 1Q profit   [Feb-08-18 06:48PM  Associated Press]
▶ Is It Time To Buy Amtech Systems Inc (ASYS)?   [Nov-20-17 07:04PM  Simply Wall St.]
▶ Amtech posts 4Q profit   [04:35PM  Associated Press]
▶ 5 Stocks in Focus on New Analyst Coverage   [Oct-25-17 08:36AM  Zacks]
▶ Amtech posts 3Q profit   [Aug-09-17 10:20PM  Associated Press]
▶ Amtech (ASYS) in Focus: Stock Moves 5.1% Higher   [Jun-08-17 08:35AM  Zacks]
▶ ETFs with exposure to Amtech Systems, Inc. : May 30, 2017   [May-30-17 12:17PM  Capital Cube]
▶ Amtech Systems reports big revenue increase, record solar bookings   [May-11-17 01:15AM  American City Business Journals]
▶ Amtech reports 2Q loss   [May-10-17 05:22PM  Associated Press]

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