Intrinsic value of Broadwind Energy, Inc. - BWEN

Previous Close

$1.74

  Intrinsic Value

$472.57

stock screener

  Rating & Target

str. buy

+999%

Previous close

$1.74

 
Intrinsic value

$472.57

 
Up/down potential

+999%

 
Rating

str. buy

We calculate the intrinsic value of BWEN 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 0.0

 

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, %
  53.00
  48.20
  43.88
  39.99
  36.49
  33.34
  30.51
  27.96
  25.66
  23.60
  21.74
  20.06
  18.56
  17.20
  15.98
  14.88
  13.89
  13.01
  12.20
  11.48
  10.84
  10.25
  9.73
  9.25
  8.83
  8.45
  8.10
  7.79
  7.51
  7.26
Revenue, $m
  191
  283
  408
  571
  779
  1,039
  1,356
  1,735
  2,180
  2,695
  3,281
  3,939
  4,670
  5,473
  6,348
  7,293
  8,306
  9,386
  10,532
  11,741
  13,013
  14,347
  15,743
  17,200
  18,718
  20,299
  21,944
  23,654
  25,430
  27,277
Variable operating expenses, $m
  37
  53
  74
  101
  136
  180
  234
  298
  373
  460
  554
  665
  788
  924
  1,072
  1,231
  1,402
  1,584
  1,778
  1,982
  2,197
  2,422
  2,657
  2,903
  3,160
  3,427
  3,704
  3,993
  4,293
  4,604
Fixed operating expenses, $m
  129
  132
  135
  137
  140
  144
  147
  150
  153
  157
  160
  164
  167
  171
  175
  178
  182
  186
  191
  195
  199
  203
  208
  212
  217
  222
  227
  232
  237
  242
Total operating expenses, $m
  166
  185
  209
  238
  276
  324
  381
  448
  526
  617
  714
  829
  955
  1,095
  1,247
  1,409
  1,584
  1,770
  1,969
  2,177
  2,396
  2,625
  2,865
  3,115
  3,377
  3,649
  3,931
  4,225
  4,530
  4,846
Operating income, $m
  25
  99
  200
  332
  502
  715
  976
  1,287
  1,654
  2,079
  2,567
  3,110
  3,714
  4,378
  5,102
  5,883
  6,721
  7,615
  8,563
  9,564
  10,618
  11,722
  12,878
  14,084
  15,342
  16,651
  18,013
  19,429
  20,901
  22,430
EBITDA, $m
  43
  123
  231
  375
  559
  788
  1,070
  1,407
  1,803
  2,261
  2,783
  3,370
  4,022
  4,739
  5,520
  6,363
  7,268
  8,233
  9,257
  10,337
  11,474
  12,667
  13,914
  15,216
  16,574
  17,987
  19,458
  20,986
  22,575
  24,226
Interest expense (income), $m
  0
  1
  4
  8
  13
  20
  29
  40
  54
  70
  89
  110
  135
  163
  194
  228
  265
  305
  348
  394
  443
  494
  548
  605
  664
  726
  790
  857
  927
  999
  1,075
Earnings before tax, $m
  24
  95
  191
  319
  482
  686
  935
  1,234
  1,585
  1,990
  2,456
  2,975
  3,551
  4,184
  4,873
  5,618
  6,416
  7,267
  8,169
  9,122
  10,124
  11,174
  12,273
  13,420
  14,616
  15,861
  17,156
  18,502
  19,902
  21,356
Tax expense, $m
  6
  26
  52
  86
  130
  185
  253
  333
  428
  537
  663
  803
  959
  1,130
  1,316
  1,517
  1,732
  1,962
  2,206
  2,463
  2,733
  3,017
  3,314
  3,623
  3,946
  4,282
  4,632
  4,996
  5,373
  5,766
Net income, $m
  17
  69
  140
  233
  352
  501
  683
  901
  1,157
  1,453
  1,793
  2,172
  2,592
  3,055
  3,558
  4,101
  4,684
  5,305
  5,963
  6,659
  7,390
  8,157
  8,959
  9,797
  10,670
  11,578
  12,524
  13,507
  14,528
  15,590

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
  152
  225
  323
  453
  618
  824
  1,075
  1,376
  1,729
  2,137
  2,602
  3,124
  3,703
  4,340
  5,034
  5,783
  6,587
  7,443
  8,352
  9,311
  10,320
  11,378
  12,485
  13,640
  14,844
  16,098
  17,402
  18,758
  20,167
  21,631
Adjusted assets (=assets-cash), $m
  152
  225
  323
  453
  618
  824
  1,075
  1,376
  1,729
  2,137
  2,602
  3,124
  3,703
  4,340
  5,034
  5,783
  6,587
  7,443
  8,352
  9,311
  10,320
  11,378
  12,485
  13,640
  14,844
  16,098
  17,402
  18,758
  20,167
  21,631
Revenue / Adjusted assets
  1.257
  1.258
  1.263
  1.260
  1.261
  1.261
  1.261
  1.261
  1.261
  1.261
  1.261
  1.261
  1.261
  1.261
  1.261
  1.261
  1.261
  1.261
  1.261
  1.261
  1.261
  1.261
  1.261
  1.261
  1.261
  1.261
  1.261
  1.261
  1.261
  1.261
Average production assets, $m
  91
  134
  193
  271
  369
  493
  643
  822
  1,034
  1,277
  1,555
  1,867
  2,214
  2,594
  3,009
  3,457
  3,937
  4,449
  4,992
  5,565
  6,168
  6,801
  7,462
  8,153
  8,873
  9,622
  10,401
  11,212
  12,054
  12,929
Working capital, $m
  5
  7
  10
  14
  19
  25
  33
  42
  52
  65
  79
  95
  112
  131
  152
  175
  199
  225
  253
  282
  312
  344
  378
  413
  449
  487
  527
  568
  610
  655
Total debt, $m
  44
  86
  141
  214
  307
  423
  565
  734
  933
  1,162
  1,424
  1,718
  2,044
  2,403
  2,793
  3,215
  3,667
  4,150
  4,661
  5,201
  5,769
  6,365
  6,988
  7,638
  8,316
  9,022
  9,756
  10,520
  11,313
  12,137
Total liabilities, $m
  85
  127
  182
  255
  348
  464
  605
  775
  974
  1,203
  1,465
  1,759
  2,085
  2,444
  2,834
  3,256
  3,708
  4,191
  4,702
  5,242
  5,810
  6,406
  7,029
  7,679
  8,357
  9,063
  9,797
  10,561
  11,354
  12,178
Total equity, $m
  66
  98
  141
  198
  270
  360
  470
  601
  756
  934
  1,137
  1,365
  1,618
  1,897
  2,200
  2,527
  2,878
  3,253
  3,650
  4,069
  4,510
  4,972
  5,456
  5,961
  6,487
  7,035
  7,605
  8,197
  8,813
  9,453
Total liabilities and equity, $m
  151
  225
  323
  453
  618
  824
  1,075
  1,376
  1,730
  2,137
  2,602
  3,124
  3,703
  4,341
  5,034
  5,783
  6,586
  7,444
  8,352
  9,311
  10,320
  11,378
  12,485
  13,640
  14,844
  16,098
  17,402
  18,758
  20,167
  21,631
Debt-to-equity ratio
  0.670
  0.870
  1.000
  1.080
  1.140
  1.170
  1.200
  1.220
  1.230
  1.240
  1.250
  1.260
  1.260
  1.270
  1.270
  1.270
  1.270
  1.280
  1.280
  1.280
  1.280
  1.280
  1.280
  1.280
  1.280
  1.280
  1.280
  1.280
  1.280
  1.280
Adjusted equity ratio
  0.437
  0.437
  0.437
  0.437
  0.437
  0.437
  0.437
  0.437
  0.437
  0.437
  0.437
  0.437
  0.437
  0.437
  0.437
  0.437
  0.437
  0.437
  0.437
  0.437
  0.437
  0.437
  0.437
  0.437
  0.437
  0.437
  0.437
  0.437
  0.437
  0.437

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  17
  69
  140
  233
  352
  501
  683
  901
  1,157
  1,453
  1,793
  2,172
  2,592
  3,055
  3,558
  4,101
  4,684
  5,305
  5,963
  6,659
  7,390
  8,157
  8,959
  9,797
  10,670
  11,578
  12,524
  13,507
  14,528
  15,590
Depreciation, amort., depletion, $m
  17
  24
  32
  42
  56
  73
  94
  119
  148
  182
  216
  259
  307
  360
  418
  480
  547
  618
  693
  773
  857
  945
  1,036
  1,132
  1,232
  1,336
  1,445
  1,557
  1,674
  1,796
Funds from operations, $m
  35
  93
  171
  275
  408
  574
  777
  1,020
  1,305
  1,635
  2,009
  2,431
  2,900
  3,415
  3,976
  4,581
  5,230
  5,923
  6,657
  7,432
  8,247
  9,102
  9,996
  10,929
  11,902
  12,915
  13,968
  15,064
  16,202
  17,385
Change in working capital, $m
  2
  2
  3
  4
  5
  6
  8
  9
  11
  12
  14
  16
  18
  19
  21
  23
  24
  26
  27
  29
  31
  32
  33
  35
  36
  38
  39
  41
  43
  44
Cash from operations, $m
  33
  91
  169
  271
  403
  568
  769
  1,011
  1,294
  1,623
  1,995
  2,415
  2,882
  3,396
  3,955
  4,558
  5,206
  5,897
  6,629
  7,403
  8,216
  9,070
  9,962
  10,894
  11,866
  12,877
  13,929
  15,023
  16,160
  17,341
Maintenance CAPEX, $m
  -8
  -13
  -19
  -27
  -38
  -51
  -68
  -89
  -114
  -144
  -177
  -216
  -259
  -307
  -360
  -418
  -480
  -547
  -618
  -693
  -773
  -857
  -945
  -1,036
  -1,132
  -1,232
  -1,336
  -1,445
  -1,557
  -1,674
New CAPEX, $m
  -31
  -44
  -59
  -77
  -99
  -123
  -150
  -180
  -211
  -244
  -278
  -312
  -346
  -381
  -415
  -448
  -480
  -512
  -543
  -573
  -603
  -632
  -661
  -691
  -720
  -749
  -779
  -810
  -842
  -875
Cash from investing activities, $m
  -39
  -57
  -78
  -104
  -137
  -174
  -218
  -269
  -325
  -388
  -455
  -528
  -605
  -688
  -775
  -866
  -960
  -1,059
  -1,161
  -1,266
  -1,376
  -1,489
  -1,606
  -1,727
  -1,852
  -1,981
  -2,115
  -2,255
  -2,399
  -2,549
Free cash flow, $m
  -6
  34
  91
  167
  267
  393
  551
  742
  969
  1,235
  1,540
  1,887
  2,277
  2,707
  3,180
  3,693
  4,246
  4,838
  5,468
  6,136
  6,840
  7,581
  8,356
  9,167
  10,013
  10,895
  11,813
  12,768
  13,760
  14,792
Issuance/(repayment) of debt, $m
  30
  41
  56
  73
  93
  116
  142
  169
  199
  230
  262
  294
  326
  359
  391
  422
  452
  482
  511
  540
  568
  596
  623
  650
  678
  706
  734
  763
  793
  824
Issuance/(repurchase) of shares, $m
  5
  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  
  35
  41
  56
  73
  93
  116
  142
  169
  199
  230
  262
  294
  326
  359
  391
  422
  452
  482
  511
  540
  568
  596
  623
  650
  678
  706
  734
  763
  793
  824
Total cash flow (excl. dividends), $m
  29
  75
  146
  240
  360
  509
  692
  911
  1,168
  1,465
  1,802
  2,181
  2,603
  3,066
  3,570
  4,114
  4,698
  5,320
  5,980
  6,676
  7,408
  8,176
  8,979
  9,818
  10,691
  11,601
  12,547
  13,531
  14,554
  15,616
Retained Cash Flow (-), $m
  -23
  -32
  -43
  -57
  -72
  -90
  -110
  -131
  -154
  -178
  -203
  -228
  -253
  -278
  -303
  -327
  -351
  -374
  -397
  -419
  -441
  -462
  -484
  -505
  -526
  -548
  -570
  -592
  -616
  -640
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
  6
  44
  103
  183
  288
  419
  582
  780
  1,014
  1,287
  1,599
  1,953
  2,350
  2,788
  3,267
  3,787
  4,347
  4,946
  5,583
  6,257
  6,967
  7,714
  8,496
  9,313
  10,165
  11,053
  11,977
  12,939
  13,938
  14,976
Discount rate, %
  6.20
  6.51
  6.84
  7.18
  7.54
  7.91
  8.31
  8.72
  9.16
  9.62
  10.10
  10.60
  11.13
  11.69
  12.28
  12.89
  13.53
  14.21
  14.92
  15.67
  16.45
  17.27
  18.14
  19.04
  20.00
  21.00
  22.05
  23.15
  24.30
  25.52
PV of cash for distribution, $m
  6
  38
  85
  139
  200
  266
  333
  399
  461
  514
  555
  583
  596
  593
  575
  544
  502
  452
  397
  341
  285
  232
  184
  142
  107
  78
  55
  38
  25
  16
Current shareholders' claim on cash, %
  84.7
  84.7
  84.7
  84.7
  84.7
  84.7
  84.7
  84.7
  84.7
  84.7
  84.7
  84.7
  84.7
  84.7
  84.7
  84.7
  84.7
  84.7
  84.7
  84.7
  84.7
  84.7
  84.7
  84.7
  84.7
  84.7
  84.7
  84.7
  84.7
  84.7

Broadwind Energy, Inc. provides technologically advanced products and services to energy, mining and infrastructure sector customers, primarily in the United States. The Company is engaged primarily in United States wind energy industry. The Company operates through two segments: Towers and Weldments, and Gearing. The Company's Towers and Weldments segment manufactures towers for wind turbines, specifically the large and heavier wind towers that are designed for multiple megawatt (MW) wind turbines. The Company's Gearing segment engineers, builds and remanufactures precision gears and gearing systems for oil and gas, wind energy, mining, steel and other industrial applications. Within the United States wind energy industry, it provides products and services to wind turbine manufacturers. It also provides precision gearing and specialty weldments to a range of industrial customers for oil and gas, mining, steel and other industrial applications.

FINANCIAL RATIOS  of  Broadwind Energy, Inc. (BWEN)

Valuation Ratios
P/E Ratio 0
Price to Sales 0.1
Price to Book 0.4
Price to Tangible Book
Price to Cash Flow 1.4
Price to Free Cash Flow 2.4
Growth Rates
Sales Growth Rate -9%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate 133.3%
Cap. Spend. - 3 Yr. Gr. Rate 0%
Financial Strength
Quick Ratio NaN
Current Ratio 0
LT Debt to Equity 5.8%
Total Debt to Equity 5.8%
Interest Coverage 0
Management Effectiveness
Return On Assets 0%
Ret/ On Assets - 3 Yr. Avg. -6.5%
Return On Total Capital 0%
Ret/ On T. Cap. - 3 Yr. Avg. -11%
Return On Equity 0%
Return On Equity - 3 Yr. Avg. -11.6%
Asset Turnover 1.6
Profitability Ratios
Gross Margin 9.9%
Gross Margin - 3 Yr. Avg. 7.8%
EBITDA Margin 4.4%
EBITDA Margin - 3 Yr. Avg. 2.6%
Operating Margin 1.1%
Oper. Margin - 3 Yr. Avg. -1.8%
Pre-Tax Margin 0.6%
Pre-Tax Margin - 3 Yr. Avg. -2.1%
Net Profit Margin 0%
Net Profit Margin - 3 Yr. Avg. -4.6%
Effective Tax Rate 0%
Eff/ Tax Rate - 3 Yr. Avg. 0%
Payout Ratio 0%

BWEN stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the BWEN stock intrinsic value calculation we used $125 million for the last fiscal year's total revenue generated by Broadwind Energy, Inc.. The default revenue input number comes from 0001 income statement of Broadwind Energy, 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 BWEN stock valuation model: a) initial revenue growth rate of 53% 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 6.2%, whose default value for BWEN is calculated based on our internal credit rating of Broadwind Energy, 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 Broadwind Energy, 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 BWEN stock the variable cost ratio is equal to 20.8%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $126 million in the base year in the intrinsic value calculation for BWEN 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 9.5% for Broadwind Energy, Inc..

Corporate tax rate of 27% is the nominal tax rate for Broadwind Energy, 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 BWEN 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 BWEN are equal to 47.4%.

Life of production assets of 7.2 years is the average useful life of capital assets used in Broadwind Energy, 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 BWEN is equal to 2.4%. 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 - $43.362 million for Broadwind Energy, 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 15.708 million for Broadwind Energy, 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 Broadwind Energy, Inc. at the current share price and the inputted number of shares is $0.0 billion.

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