Intrinsic value of Ballard Power Systems, Inc. - BLDP

Previous Close

$4.20

  Intrinsic Value

$0.28

stock screener

  Rating & Target

str. sell

-93%

Previous close

$4.20

 
Intrinsic value

$0.28

 
Up/down potential

-93%

 
Rating

str. sell

We calculate the intrinsic value of BLDP 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 1.0

 

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
  99
  101
  104
  107
  110
  114
  117
  122
  126
  131
  136
  142
  148
  154
  160
  167
  175
  183
  191
  200
  209
  219
  229
  240
  251
  263
  276
  289
  303
  318
Variable operating expenses, $m
  36
  36
  37
  38
  39
  41
  42
  43
  45
  46
  46
  48
  50
  52
  54
  57
  59
  62
  65
  68
  71
  74
  78
  81
  85
  89
  93
  98
  103
  108
Fixed operating expenses, $m
  86
  88
  90
  92
  94
  96
  98
  100
  102
  104
  107
  109
  111
  114
  116
  119
  122
  124
  127
  130
  133
  136
  139
  142
  145
  148
  151
  154
  158
  161
Total operating expenses, $m
  122
  124
  127
  130
  133
  137
  140
  143
  147
  150
  153
  157
  161
  166
  170
  176
  181
  186
  192
  198
  204
  210
  217
  223
  230
  237
  244
  252
  261
  269
Operating income, $m
  -23
  -23
  -23
  -23
  -23
  -23
  -22
  -22
  -21
  -20
  -17
  -15
  -14
  -12
  -10
  -8
  -6
  -3
  -1
  2
  6
  9
  13
  17
  22
  26
  32
  37
  43
  49
EBITDA, $m
  -17
  -17
  -18
  -18
  -17
  -17
  -16
  -16
  -15
  -14
  -12
  -11
  -9
  -7
  -5
  -3
  0
  3
  6
  9
  12
  16
  20
  25
  30
  35
  40
  46
  53
  59
Interest expense (income), $m
  0
  0
  1
  1
  1
  1
  1
  1
  2
  2
  2
  2
  2
  3
  3
  3
  4
  4
  4
  5
  5
  6
  6
  7
  7
  8
  8
  9
  10
  10
  11
Earnings before tax, $m
  -23
  -24
  -24
  -24
  -24
  -24
  -24
  -23
  -23
  -22
  -19
  -18
  -17
  -15
  -14
  -12
  -10
  -8
  -6
  -3
  0
  3
  6
  10
  14
  18
  22
  27
  32
  38
Tax expense, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  1
  2
  3
  4
  5
  6
  7
  9
  10
Net income, $m
  -23
  -24
  -24
  -24
  -24
  -24
  -24
  -23
  -23
  -22
  -19
  -18
  -17
  -15
  -14
  -12
  -10
  -8
  -6
  -3
  0
  2
  5
  7
  10
  13
  16
  20
  24
  28

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
  205
  210
  215
  221
  228
  235
  243
  252
  261
  271
  282
  293
  305
  318
  332
  347
  362
  378
  396
  414
  433
  453
  474
  497
  521
  545
  572
  599
  628
  659
Adjusted assets (=assets-cash), $m
  205
  210
  215
  221
  228
  235
  243
  252
  261
  271
  282
  293
  305
  318
  332
  347
  362
  378
  396
  414
  433
  453
  474
  497
  521
  545
  572
  599
  628
  659
Revenue / Adjusted assets
  0.483
  0.481
  0.484
  0.484
  0.482
  0.485
  0.481
  0.484
  0.483
  0.483
  0.482
  0.485
  0.485
  0.484
  0.482
  0.481
  0.483
  0.484
  0.482
  0.483
  0.483
  0.483
  0.483
  0.483
  0.482
  0.483
  0.483
  0.482
  0.482
  0.483
Average production assets, $m
  46
  47
  48
  50
  51
  53
  55
  57
  59
  61
  63
  66
  69
  72
  75
  78
  81
  85
  89
  93
  97
  102
  107
  112
  117
  123
  129
  135
  141
  148
Working capital, $m
  23
  23
  24
  25
  25
  26
  27
  28
  29
  30
  31
  33
  34
  35
  37
  39
  40
  42
  44
  46
  48
  50
  53
  55
  58
  61
  64
  67
  70
  73
Total debt, $m
  7
  8
  10
  12
  14
  16
  19
  22
  25
  28
  31
  35
  38
  42
  47
  51
  56
  61
  67
  72
  78
  85
  91
  98
  106
  114
  122
  130
  139
  149
Total liabilities, $m
  64
  66
  67
  69
  71
  74
  76
  79
  82
  85
  88
  92
  96
  100
  104
  108
  113
  118
  124
  129
  135
  142
  148
  156
  163
  171
  179
  188
  197
  206
Total equity, $m
  141
  144
  148
  152
  156
  161
  167
  173
  179
  186
  194
  201
  210
  219
  228
  238
  249
  260
  272
  284
  297
  311
  326
  341
  358
  375
  393
  412
  432
  453
Total liabilities and equity, $m
  205
  210
  215
  221
  227
  235
  243
  252
  261
  271
  282
  293
  306
  319
  332
  346
  362
  378
  396
  413
  432
  453
  474
  497
  521
  546
  572
  600
  629
  659
Debt-to-equity ratio
  0.050
  0.060
  0.070
  0.080
  0.090
  0.100
  0.110
  0.120
  0.140
  0.150
  0.160
  0.170
  0.180
  0.190
  0.200
  0.220
  0.230
  0.240
  0.250
  0.250
  0.260
  0.270
  0.280
  0.290
  0.300
  0.300
  0.310
  0.320
  0.320
  0.330
Adjusted equity ratio
  0.687
  0.687
  0.687
  0.687
  0.687
  0.687
  0.687
  0.687
  0.687
  0.687
  0.687
  0.687
  0.687
  0.687
  0.687
  0.687
  0.687
  0.687
  0.687
  0.687
  0.687
  0.687
  0.687
  0.687
  0.687
  0.687
  0.687
  0.687
  0.687
  0.687

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  -23
  -24
  -24
  -24
  -24
  -24
  -24
  -23
  -23
  -22
  -19
  -18
  -17
  -15
  -14
  -12
  -10
  -8
  -6
  -3
  0
  2
  5
  7
  10
  13
  16
  20
  24
  28
Depreciation, amort., depletion, $m
  5
  5
  6
  6
  6
  6
  6
  6
  6
  6
  4
  5
  5
  5
  5
  5
  6
  6
  6
  6
  7
  7
  7
  8
  8
  9
  9
  9
  10
  10
Funds from operations, $m
  -18
  -18
  -18
  -18
  -18
  -18
  -18
  -17
  -16
  -16
  -14
  -13
  -12
  -10
  -9
  -7
  -4
  -2
  1
  4
  7
  9
  12
  15
  18
  22
  25
  29
  34
  38
Change in working capital, $m
  0
  1
  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
Cash from operations, $m
  -18
  -19
  -19
  -19
  -19
  -19
  -19
  -18
  -17
  -17
  -16
  -15
  -13
  -12
  -10
  -8
  -6
  -4
  -1
  2
  5
  7
  10
  12
  16
  19
  22
  26
  30
  35
Maintenance CAPEX, $m
  -3
  -3
  -3
  -3
  -3
  -4
  -4
  -4
  -4
  -4
  -4
  -4
  -5
  -5
  -5
  -5
  -5
  -6
  -6
  -6
  -6
  -7
  -7
  -7
  -8
  -8
  -9
  -9
  -9
  -10
New CAPEX, $m
  -1
  -1
  -1
  -1
  -2
  -2
  -2
  -2
  -2
  -2
  -2
  -3
  -3
  -3
  -3
  -3
  -3
  -4
  -4
  -4
  -4
  -5
  -5
  -5
  -5
  -6
  -6
  -6
  -7
  -7
Cash from investing activities, $m
  -4
  -4
  -4
  -4
  -5
  -6
  -6
  -6
  -6
  -6
  -6
  -7
  -8
  -8
  -8
  -8
  -8
  -10
  -10
  -10
  -10
  -12
  -12
  -12
  -13
  -14
  -15
  -15
  -16
  -17
Free cash flow, $m
  -22
  -23
  -23
  -24
  -24
  -24
  -24
  -24
  -23
  -23
  -22
  -22
  -21
  -19
  -18
  -17
  -15
  -13
  -11
  -9
  -6
  -4
  -2
  0
  2
  5
  8
  11
  14
  18
Issuance/(repayment) of debt, $m
  1
  1
  2
  2
  2
  2
  3
  3
  3
  3
  3
  4
  4
  4
  4
  5
  5
  5
  5
  6
  6
  6
  7
  7
  7
  8
  8
  9
  9
  10
Issuance/(repurchase) of shares, $m
  26
  27
  28
  28
  29
  29
  29
  29
  29
  29
  26
  26
  25
  24
  23
  22
  21
  19
  17
  15
  13
  12
  10
  8
  6
  4
  2
  0
  0
  0
Cash from financing (excl. dividends), $m  
  27
  28
  30
  30
  31
  31
  32
  32
  32
  32
  29
  30
  29
  28
  27
  27
  26
  24
  22
  21
  19
  18
  17
  15
  13
  12
  10
  9
  9
  10
Total cash flow (excl. dividends), $m
  4
  5
  6
  6
  7
  7
  8
  8
  9
  9
  7
  8
  8
  9
  9
  10
  10
  11
  12
  12
  13
  14
  14
  15
  16
  17
  18
  20
  23
  28
Retained Cash Flow (-), $m
  -26
  -27
  -28
  -28
  -29
  -29
  -29
  -29
  -29
  -29
  -26
  -26
  -25
  -24
  -23
  -22
  -21
  -19
  -17
  -15
  -13
  -14
  -15
  -15
  -16
  -17
  -18
  -19
  -20
  -21
Prev. year cash balance distribution, $m
  145
  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
  124
  -21
  -22
  -22
  -22
  -22
  -22
  -21
  -21
  -20
  -19
  -18
  -17
  -15
  -14
  -12
  -10
  -8
  -6
  -3
  0
  0
  0
  0
  0
  0
  0
  1
  4
  7
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
  119
  -20
  -19
  -18
  -17
  -16
  -15
  -13
  -12
  -10
  -9
  -8
  -6
  -5
  -4
  -3
  -2
  -1
  -1
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Current shareholders' claim on cash, %
  94.9
  89.9
  85.2
  80.7
  76.5
  72.6
  69.0
  65.7
  62.6
  59.8
  57.5
  55.3
  53.4
  51.7
  50.2
  48.8
  47.6
  46.6
  45.7
  44.9
  44.3
  43.8
  43.4
  43.1
  42.9
  42.8
  42.7
  42.7
  42.7
  42.7

Ballard Power Systems Inc. is engaged in the design, development, manufacture, sale and service of proton exchange membrane (PEM) fuel cell products for a range of applications, focusing on the power product markets of heavy-duty motive (consisting of bus and tram applications), portable power, material handling and backup power, as well as the delivery of technology solutions, including engineering services, technology transfer and the license and sale of its intellectual property portfolio and fundamental knowledge for a range of fuel cell applications. As of December 31, 2016, the Company provided products in four product classes, such as Fuel cell stacks, Fuel cell modules, Fuel cell systems and Power management systems. The Company provides FCgen and FCveloCity fuel cell stacks to original equipment manufacturer (OEM) customers and system integrators that use the stacks to produce fuel cell systems for power solutions.

FINANCIAL RATIOS  of  Ballard Power Systems, Inc. (BLDP)

Valuation Ratios
P/E Ratio -35
Price to Sales 8.6
Price to Book 5.9
Price to Tangible Book
Price to Cash Flow -183.5
Price to Free Cash Flow -66.7
Growth Rates
Sales Growth Rate 51.8%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate 75%
Cap. Spend. - 3 Yr. Gr. Rate NaN%
Financial Strength
Quick Ratio 73
Current Ratio 0
LT Debt to Equity 5.6%
Total Debt to Equity 6.4%
Interest Coverage 0
Management Effectiveness
Return On Assets -12.2%
Ret/ On Assets - 3 Yr. Avg. -13%
Return On Total Capital -16.5%
Ret/ On T. Cap. - 3 Yr. Avg. -17.8%
Return On Equity -17.6%
Return On Equity - 3 Yr. Avg. -20%
Asset Turnover 0.5
Profitability Ratios
Gross Margin 28.2%
Gross Margin - 3 Yr. Avg. 20.2%
EBITDA Margin -18.8%
EBITDA Margin - 3 Yr. Avg. -18.6%
Operating Margin -22.4%
Oper. Margin - 3 Yr. Avg. -35.9%
Pre-Tax Margin -24.7%
Pre-Tax Margin - 3 Yr. Avg. -25.8%
Net Profit Margin -24.7%
Net Profit Margin - 3 Yr. Avg. -25.3%
Effective Tax Rate -4.8%
Eff/ Tax Rate - 3 Yr. Avg. -8.3%
Payout Ratio 0%

BLDP stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the BLDP stock intrinsic value calculation we used $97 million for the last fiscal year's total revenue generated by Ballard Power Systems, Inc.. The default revenue input number comes from 0001 income statement of Ballard Power Systems, 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 BLDP 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 BLDP is calculated based on our internal credit rating of Ballard Power Systems, 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 Ballard Power Systems, 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 BLDP stock the variable cost ratio is equal to 36.1%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $84 million in the base year in the intrinsic value calculation for BLDP 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% for Ballard Power Systems, Inc..

Corporate tax rate of 27% is the nominal tax rate for Ballard Power Systems, 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 BLDP 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 BLDP are equal to 46.6%.

Life of production assets of 14.4 years is the average useful life of capital assets used in Ballard Power Systems, 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 BLDP is equal to 23%. 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 - $282.6 million for Ballard Power Systems, 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 231.905 million for Ballard Power Systems, 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 Ballard Power Systems, Inc. at the current share price and the inputted number of shares is $1.0 billion.

RELATED COMPANIES Price Int.Val. Rating
PLUG Plug Power, In 2.29 5.92  str.buy
FCEL FuelCell Energ 0.724 0.13  str.sell
HYGS Hydrogenics Co 14.89 0.25  str.sell

CONTACT US      

About X-FIN       Privacy policy       Terms of use      

Copyright © X-FIN.com 2005-2019. All rigths reserved.