Intrinsic value of Broadwind Energy - BWEN

Previous Close

$1.80

  Intrinsic Value

$0.73

stock screener

  Rating & Target

str. sell

-60%

Previous close

$1.80

 
Intrinsic value

$0.73

 
Up/down potential

-60%

 
Rating

str. sell

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, %
  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
  150
  153
  157
  162
  166
  172
  178
  184
  191
  198
  206
  214
  223
  233
  243
  253
  265
  277
  289
  302
  316
  331
  347
  363
  380
  399
  418
  438
  459
  481
Variable operating expenses, $m
  109
  111
  114
  117
  121
  125
  129
  133
  138
  143
  147
  153
  159
  166
  173
  181
  189
  197
  206
  216
  226
  236
  247
  259
  272
  284
  298
  313
  328
  344
Fixed operating expenses, $m
  49
  50
  51
  52
  54
  55
  56
  57
  58
  60
  61
  62
  64
  65
  67
  68
  69
  71
  73
  74
  76
  77
  79
  81
  83
  85
  86
  88
  90
  92
Total operating expenses, $m
  158
  161
  165
  169
  175
  180
  185
  190
  196
  203
  208
  215
  223
  231
  240
  249
  258
  268
  279
  290
  302
  313
  326
  340
  355
  369
  384
  401
  418
  436
Operating income, $m
  -8
  -8
  -8
  -8
  -8
  -8
  -7
  -7
  -6
  -5
  -2
  -1
  0
  2
  3
  5
  6
  8
  10
  12
  15
  17
  20
  23
  26
  30
  33
  37
  41
  46
EBITDA, $m
  2
  2
  2
  3
  3
  4
  5
  6
  7
  8
  9
  11
  13
  14
  16
  19
  21
  23
  26
  29
  32
  36
  39
  43
  47
  52
  56
  61
  67
  72
Interest expense (income), $m
  0
  1
  1
  1
  2
  2
  2
  2
  2
  2
  2
  3
  3
  3
  3
  3
  4
  4
  4
  4
  5
  5
  5
  6
  6
  7
  7
  7
  8
  8
  9
Earnings before tax, $m
  -10
  -10
  -10
  -10
  -10
  -9
  -9
  -9
  -8
  -7
  -5
  -4
  -3
  -2
  0
  1
  2
  4
  6
  8
  10
  12
  14
  17
  20
  23
  26
  29
  33
  37
Tax expense, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  1
  1
  2
  2
  3
  3
  4
  5
  5
  6
  7
  8
  9
  10
Net income, $m
  -10
  -10
  -10
  -10
  -10
  -9
  -9
  -9
  -8
  -7
  -5
  -4
  -3
  -2
  0
  1
  2
  3
  4
  6
  7
  9
  10
  12
  14
  17
  19
  21
  24
  27

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
  114
  117
  120
  123
  127
  131
  136
  141
  146
  151
  157
  164
  171
  178
  186
  194
  202
  211
  221
  231
  242
  253
  265
  278
  291
  305
  319
  335
  351
  368
Adjusted assets (=assets-cash), $m
  114
  117
  120
  123
  127
  131
  136
  141
  146
  151
  157
  164
  171
  178
  186
  194
  202
  211
  221
  231
  242
  253
  265
  278
  291
  305
  319
  335
  351
  368
Revenue / Adjusted assets
  1.316
  1.308
  1.308
  1.317
  1.307
  1.313
  1.309
  1.305
  1.308
  1.311
  1.312
  1.305
  1.304
  1.309
  1.306
  1.304
  1.312
  1.313
  1.308
  1.307
  1.306
  1.308
  1.309
  1.306
  1.306
  1.308
  1.310
  1.307
  1.308
  1.307
Average production assets, $m
  63
  64
  66
  68
  70
  72
  74
  77
  80
  83
  86
  90
  94
  97
  102
  106
  111
  116
  121
  127
  133
  139
  145
  152
  159
  167
  175
  184
  192
  202
Working capital, $m
  9
  10
  10
  10
  10
  11
  11
  12
  12
  12
  13
  14
  14
  15
  15
  16
  17
  17
  18
  19
  20
  21
  22
  23
  24
  25
  26
  28
  29
  30
Total debt, $m
  18
  19
  20
  21
  23
  25
  26
  28
  31
  33
  35
  38
  41
  44
  47
  50
  54
  58
  62
  66
  70
  75
  80
  85
  90
  96
  102
  108
  115
  122
Total liabilities, $m
  47
  48
  49
  51
  52
  54
  56
  58
  60
  62
  65
  68
  70
  73
  76
  80
  83
  87
  91
  95
  100
  104
  109
  114
  120
  126
  132
  138
  145
  152
Total equity, $m
  67
  69
  71
  73
  75
  77
  80
  83
  86
  89
  93
  96
  100
  105
  109
  114
  119
  124
  130
  136
  142
  149
  156
  163
  171
  179
  188
  197
  206
  216
Total liabilities and equity, $m
  114
  117
  120
  124
  127
  131
  136
  141
  146
  151
  158
  164
  170
  178
  185
  194
  202
  211
  221
  231
  242
  253
  265
  277
  291
  305
  320
  335
  351
  368
Debt-to-equity ratio
  0.260
  0.270
  0.280
  0.290
  0.310
  0.320
  0.330
  0.340
  0.360
  0.370
  0.380
  0.390
  0.410
  0.420
  0.430
  0.440
  0.450
  0.460
  0.470
  0.480
  0.490
  0.500
  0.510
  0.520
  0.530
  0.540
  0.540
  0.550
  0.560
  0.560
Adjusted equity ratio
  0.588
  0.588
  0.588
  0.588
  0.588
  0.588
  0.588
  0.588
  0.588
  0.588
  0.588
  0.588
  0.588
  0.588
  0.588
  0.588
  0.588
  0.588
  0.588
  0.588
  0.588
  0.588
  0.588
  0.588
  0.588
  0.588
  0.588
  0.588
  0.588
  0.588

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  -10
  -10
  -10
  -10
  -10
  -9
  -9
  -9
  -8
  -7
  -5
  -4
  -3
  -2
  0
  1
  2
  3
  4
  6
  7
  9
  10
  12
  14
  17
  19
  21
  24
  27
Depreciation, amort., depletion, $m
  10
  11
  11
  11
  11
  12
  12
  12
  13
  13
  11
  12
  12
  13
  13
  14
  15
  15
  16
  17
  17
  18
  19
  20
  21
  22
  23
  24
  25
  27
Funds from operations, $m
  1
  1
  1
  1
  2
  2
  3
  4
  5
  6
  7
  8
  10
  11
  13
  15
  16
  18
  20
  22
  25
  27
  30
  32
  35
  39
  42
  46
  49
  53
Change in working capital, $m
  0
  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
  1
  1
  1
  1
Cash from operations, $m
  1
  1
  1
  1
  1
  2
  3
  3
  4
  5
  6
  8
  9
  11
  12
  14
  16
  17
  19
  21
  24
  26
  29
  31
  34
  37
  41
  44
  48
  52
Maintenance CAPEX, $m
  -8
  -8
  -8
  -9
  -9
  -9
  -9
  -10
  -10
  -11
  -11
  -11
  -12
  -12
  -13
  -13
  -14
  -15
  -15
  -16
  -17
  -17
  -18
  -19
  -20
  -21
  -22
  -23
  -24
  -25
New CAPEX, $m
  -1
  -1
  -2
  -2
  -2
  -2
  -2
  -3
  -3
  -3
  -3
  -4
  -4
  -4
  -4
  -4
  -5
  -5
  -5
  -6
  -6
  -6
  -7
  -7
  -7
  -8
  -8
  -8
  -9
  -9
Cash from investing activities, $m
  -9
  -9
  -10
  -11
  -11
  -11
  -11
  -13
  -13
  -14
  -14
  -15
  -16
  -16
  -17
  -17
  -19
  -20
  -20
  -22
  -23
  -23
  -25
  -26
  -27
  -29
  -30
  -31
  -33
  -34
Free cash flow, $m
  -9
  -9
  -9
  -10
  -10
  -10
  -9
  -9
  -9
  -8
  -8
  -7
  -7
  -6
  -5
  -4
  -3
  -2
  -1
  0
  1
  2
  4
  5
  7
  9
  11
  13
  15
  17
Issuance/(repayment) of debt, $m
  1
  1
  1
  1
  2
  2
  2
  2
  2
  2
  2
  3
  3
  3
  3
  3
  4
  4
  4
  4
  4
  5
  5
  5
  5
  6
  6
  6
  7
  7
Issuance/(repurchase) of shares, $m
  11
  11
  12
  12
  12
  12
  12
  11
  11
  11
  8
  7
  7
  6
  5
  4
  3
  2
  1
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash from financing (excl. dividends), $m  
  12
  12
  13
  13
  14
  14
  14
  13
  13
  13
  10
  10
  10
  9
  8
  7
  7
  6
  5
  4
  4
  5
  5
  5
  5
  6
  6
  6
  7
  7
Total cash flow (excl. dividends), $m
  3
  3
  3
  4
  4
  4
  4
  4
  4
  5
  3
  3
  3
  3
  3
  4
  4
  4
  4
  4
  6
  7
  9
  11
  12
  15
  17
  19
  22
  24
Retained Cash Flow (-), $m
  -11
  -11
  -12
  -12
  -12
  -12
  -12
  -11
  -11
  -11
  -8
  -7
  -7
  -6
  -5
  -5
  -5
  -5
  -6
  -6
  -6
  -7
  -7
  -7
  -8
  -8
  -9
  -9
  -10
  -10
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
  -8
  -8
  -8
  -8
  -8
  -7
  -7
  -6
  -5
  -5
  -4
  -3
  -2
  -1
  -1
  -1
  -1
  -1
  -1
  0
  2
  3
  5
  6
  8
  10
  12
  14
Discount rate, %
  6.90
  7.25
  7.61
  7.99
  8.39
  8.81
  9.25
  9.71
  10.19
  10.70
  11.24
  11.80
  12.39
  13.01
  13.66
  14.34
  15.06
  15.81
  16.61
  17.44
  18.31
  19.22
  20.18
  21.19
  22.25
  23.37
  24.53
  25.76
  27.05
  28.40
PV of cash for distribution, $m
  -7
  -7
  -7
  -6
  -5
  -5
  -4
  -3
  -3
  -2
  -2
  -1
  -1
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Current shareholders' claim on cash, %
  81.0
  65.4
  52.7
  42.6
  34.6
  28.2
  23.2
  19.3
  16.2
  13.7
  12.2
  10.9
  9.9
  9.2
  8.6
  8.1
  7.8
  7.6
  7.5
  7.4
  7.4
  7.4
  7.4
  7.4
  7.4
  7.4
  7.4
  7.4
  7.4
  7.4

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 (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 1.5
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 $146.785 million for the last fiscal year's total revenue generated by Broadwind Energy. The default revenue input number comes from 0001 income statement of Broadwind Energy. 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 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 6.9%, whose default value for BWEN is calculated based on our internal credit rating of Broadwind Energy, 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.
    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 72.8%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $48 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 7.7% for Broadwind Energy.

Corporate tax rate of 27% is the nominal tax rate for Broadwind Energy. 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 41.9%.

Life of production assets of 7.6 years is the average useful life of capital assets used in Broadwind Energy 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 6.3%. 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 - $66.071 million for Broadwind Energy - 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 15.471 million for Broadwind Energy 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 at the current share price and the inputted number of shares is $0.0 billion.

RELATED COMPANIES Price Int.Val. Rating
CPST Capstone Turbi 0.800 0.10  str.sell
WWD Woodward 81.57 77.69  hold

COMPANY NEWS

▶ Broadwind Energy Announces Q3 2018 Results   [Oct-30-18 07:00AM  GlobeNewswire]
▶ Broadwind Energy Announces Sale of Idle Gearing Facility   [Sep-12-18 07:00AM  GlobeNewswire]
▶ Broadwind Energy Lowers Short Term Outlook   [Sep-05-18 07:00AM  GlobeNewswire]
▶ Broadwind Energy Announces Q2 2018 Results   [Jul-31-18 08:00AM  GlobeNewswire]
▶ Broadwind Energy Announces Q1 2018 Results   [May-04-18 07:00AM  GlobeNewswire]
▶ Company News For Apr 9, 2018   [Apr-09-18 10:13AM  Zacks]
▶ Broadwind Energy Announces Recovery in Order Intake   [Apr-06-18 07:00AM  GlobeNewswire]
▶ Broadwind Energy to Present at Roth Investor Conference   [Dec-05-17 07:00AM  GlobeNewswire]
▶ Best Undervalued Stock in November   [Nov-03-17 09:02AM  Simply Wall St.]
▶ Broadwind Energy Announces Q3 2017 Results   [Oct-31-17 07:00AM  GlobeNewswire]
▶ Broadwind to Announce Q3 2017 Results on October 31   [Oct-17-17 07:00AM  GlobeNewswire]
▶ Does Broadwind Energy Incs (BWEN) PE Ratio Warrant A Buy?   [Oct-11-17 11:34AM  Simply Wall St.]
▶ Broadwind Energy Announces Q2 2017 Results   [Aug-01-17 07:00AM  GlobeNewswire]
▶ Broadwind to Announce Q2 2017 Results on August 1   [Jul-18-17 07:00AM  GlobeNewswire]
▶ Red Wolf parent Broadwind Energy sees shares drop after earnings   [03:15PM  American City Business Journals]
▶ Broadwind Energy Announces Q1 2017 Results   [May-02-17 07:00AM  GlobeNewswire]
▶ Broadwind to Announce Q1 2017 Results on May 2   [Apr-17-17 07:00AM  GlobeNewswire]
▶ Broadwind Energy to Present at Roth Investor Conference   [Mar-08-17 07:00AM  GlobeNewswire]
▶ Broadwind Energy Announces $28 Million in New Tower Orders   [Jan-18-17 07:00AM  GlobeNewswire]
▶ Broadwind Energy Announces $23 Million in New Tower Orders   [Dec-07-16 07:00AM  GlobeNewswire]

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