Intrinsic value of Commercial Vehicle Group, Inc. - CVGI

Previous Close

$7.14

  Intrinsic Value

$110.80

stock screener

  Rating & Target

str. buy

+999%

Previous close

$7.14

 
Intrinsic value

$110.80

 
Up/down potential

+999%

 
Rating

str. buy

We calculate the intrinsic value of CVGI 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 0.2

 

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, %
  18.70
  17.33
  16.10
  14.99
  13.99
  13.09
  12.28
  11.55
  10.90
  10.31
  9.78
  9.30
  8.87
  8.48
  8.13
  7.82
  7.54
  7.28
  7.06
  6.85
  6.67
  6.50
  6.35
  6.21
  6.09
  5.98
  5.89
  5.80
  5.72
  5.65
Revenue, $m
  1,066
  1,251
  1,452
  1,670
  1,903
  2,152
  2,417
  2,696
  2,989
  3,298
  3,620
  3,957
  4,308
  4,673
  5,053
  5,448
  5,859
  6,286
  6,729
  7,190
  7,670
  8,168
  8,687
  9,227
  9,789
  10,374
  10,985
  11,622
  12,286
  12,980
Variable operating expenses, $m
  794
  930
  1,079
  1,240
  1,412
  1,596
  1,792
  1,998
  2,215
  2,443
  2,674
  2,923
  3,182
  3,452
  3,733
  4,025
  4,328
  4,644
  4,971
  5,312
  5,666
  6,034
  6,417
  6,816
  7,232
  7,664
  8,115
  8,586
  9,077
  9,589
Fixed operating expenses, $m
  169
  172
  176
  180
  184
  188
  192
  196
  201
  205
  210
  214
  219
  224
  229
  234
  239
  244
  249
  255
  261
  266
  272
  278
  284
  291
  297
  303
  310
  317
Total operating expenses, $m
  963
  1,102
  1,255
  1,420
  1,596
  1,784
  1,984
  2,194
  2,416
  2,648
  2,884
  3,137
  3,401
  3,676
  3,962
  4,259
  4,567
  4,888
  5,220
  5,567
  5,927
  6,300
  6,689
  7,094
  7,516
  7,955
  8,412
  8,889
  9,387
  9,906
Operating income, $m
  103
  148
  197
  250
  307
  368
  433
  501
  574
  650
  736
  819
  906
  997
  1,091
  1,190
  1,292
  1,398
  1,508
  1,623
  1,743
  1,868
  1,997
  2,132
  2,273
  2,420
  2,573
  2,733
  2,899
  3,074
EBITDA, $m
  126
  173
  225
  281
  342
  407
  475
  548
  625
  706
  790
  879
  971
  1,067
  1,167
  1,271
  1,380
  1,492
  1,609
  1,731
  1,858
  1,990
  2,127
  2,271
  2,420
  2,575
  2,738
  2,907
  3,084
  3,269
Interest expense (income), $m
  19
  15
  20
  25
  31
  38
  45
  52
  60
  69
  77
  87
  96
  106
  117
  128
  139
  151
  164
  176
  190
  204
  218
  233
  249
  265
  282
  299
  318
  337
  357
Earnings before tax, $m
  89
  128
  172
  218
  269
  323
  380
  441
  505
  572
  649
  723
  800
  880
  963
  1,050
  1,140
  1,234
  1,332
  1,434
  1,539
  1,650
  1,764
  1,884
  2,008
  2,138
  2,274
  2,415
  2,563
  2,717
Tax expense, $m
  24
  35
  46
  59
  73
  87
  103
  119
  136
  155
  175
  195
  216
  238
  260
  284
  308
  333
  360
  387
  416
  445
  476
  509
  542
  577
  614
  652
  692
  734
Net income, $m
  65
  94
  125
  159
  196
  236
  278
  322
  369
  418
  474
  528
  584
  642
  703
  767
  833
  901
  972
  1,047
  1,124
  1,204
  1,288
  1,375
  1,466
  1,561
  1,660
  1,763
  1,871
  1,984

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
  496
  582
  676
  777
  886
  1,002
  1,125
  1,255
  1,392
  1,535
  1,685
  1,842
  2,005
  2,176
  2,352
  2,536
  2,728
  2,926
  3,133
  3,347
  3,571
  3,803
  4,044
  4,295
  4,557
  4,830
  5,114
  5,410
  5,720
  6,043
Adjusted assets (=assets-cash), $m
  496
  582
  676
  777
  886
  1,002
  1,125
  1,255
  1,392
  1,535
  1,685
  1,842
  2,005
  2,176
  2,352
  2,536
  2,728
  2,926
  3,133
  3,347
  3,571
  3,803
  4,044
  4,295
  4,557
  4,830
  5,114
  5,410
  5,720
  6,043
Revenue / Adjusted assets
  2.149
  2.149
  2.148
  2.149
  2.148
  2.148
  2.148
  2.148
  2.147
  2.149
  2.148
  2.148
  2.149
  2.148
  2.148
  2.148
  2.148
  2.148
  2.148
  2.148
  2.148
  2.148
  2.148
  2.148
  2.148
  2.148
  2.148
  2.148
  2.148
  2.148
Average production assets, $m
  90
  105
  122
  140
  160
  181
  203
  226
  251
  277
  304
  332
  362
  393
  424
  458
  492
  528
  565
  604
  644
  686
  730
  775
  822
  871
  923
  976
  1,032
  1,090
Working capital, $m
  143
  168
  195
  224
  255
  288
  324
  361
  401
  442
  485
  530
  577
  626
  677
  730
  785
  842
  902
  964
  1,028
  1,095
  1,164
  1,236
  1,312
  1,390
  1,472
  1,557
  1,646
  1,739
Total debt, $m
  220
  283
  351
  424
  503
  587
  676
  771
  870
  974
  1,083
  1,196
  1,315
  1,438
  1,566
  1,700
  1,838
  1,982
  2,132
  2,288
  2,449
  2,618
  2,793
  2,975
  3,165
  3,362
  3,568
  3,783
  4,008
  4,242
Total liabilities, $m
  360
  422
  490
  564
  642
  726
  816
  910
  1,009
  1,113
  1,222
  1,335
  1,454
  1,577
  1,706
  1,839
  1,978
  2,122
  2,271
  2,427
  2,589
  2,757
  2,932
  3,114
  3,304
  3,502
  3,708
  3,923
  4,147
  4,381
Total equity, $m
  136
  160
  186
  214
  244
  276
  309
  345
  383
  422
  463
  507
  551
  598
  647
  698
  750
  805
  862
  921
  982
  1,046
  1,112
  1,181
  1,253
  1,328
  1,406
  1,488
  1,573
  1,662
Total liabilities and equity, $m
  496
  582
  676
  778
  886
  1,002
  1,125
  1,255
  1,392
  1,535
  1,685
  1,842
  2,005
  2,175
  2,353
  2,537
  2,728
  2,927
  3,133
  3,348
  3,571
  3,803
  4,044
  4,295
  4,557
  4,830
  5,114
  5,411
  5,720
  6,043
Debt-to-equity ratio
  1.620
  1.770
  1.890
  1.980
  2.060
  2.130
  2.190
  2.230
  2.270
  2.310
  2.340
  2.360
  2.380
  2.400
  2.420
  2.440
  2.450
  2.460
  2.470
  2.490
  2.490
  2.500
  2.510
  2.520
  2.530
  2.530
  2.540
  2.540
  2.550
  2.550
Adjusted equity ratio
  0.275
  0.275
  0.275
  0.275
  0.275
  0.275
  0.275
  0.275
  0.275
  0.275
  0.275
  0.275
  0.275
  0.275
  0.275
  0.275
  0.275
  0.275
  0.275
  0.275
  0.275
  0.275
  0.275
  0.275
  0.275
  0.275
  0.275
  0.275
  0.275
  0.275

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  65
  94
  125
  159
  196
  236
  278
  322
  369
  418
  474
  528
  584
  642
  703
  767
  833
  901
  972
  1,047
  1,124
  1,204
  1,288
  1,375
  1,466
  1,561
  1,660
  1,763
  1,871
  1,984
Depreciation, amort., depletion, $m
  22
  25
  28
  32
  35
  39
  43
  47
  51
  56
  54
  59
  65
  70
  76
  82
  88
  94
  101
  108
  115
  123
  130
  138
  147
  156
  165
  174
  184
  195
Funds from operations, $m
  87
  119
  153
  191
  231
  275
  320
  369
  420
  474
  528
  587
  649
  712
  779
  848
  920
  995
  1,073
  1,154
  1,239
  1,327
  1,418
  1,513
  1,613
  1,716
  1,824
  1,937
  2,055
  2,178
Change in working capital, $m
  23
  25
  27
  29
  31
  33
  35
  37
  39
  41
  43
  45
  47
  49
  51
  53
  55
  57
  59
  62
  64
  67
  69
  72
  75
  78
  82
  85
  89
  93
Cash from operations, $m
  65
  94
  127
  162
  200
  241
  285
  332
  381
  433
  485
  542
  602
  664
  728
  795
  865
  938
  1,014
  1,093
  1,175
  1,260
  1,349
  1,441
  1,537
  1,638
  1,743
  1,852
  1,966
  2,085
Maintenance CAPEX, $m
  -14
  -16
  -19
  -22
  -25
  -29
  -32
  -36
  -40
  -45
  -49
  -54
  -59
  -65
  -70
  -76
  -82
  -88
  -94
  -101
  -108
  -115
  -123
  -130
  -138
  -147
  -156
  -165
  -174
  -184
New CAPEX, $m
  -14
  -16
  -17
  -18
  -20
  -21
  -22
  -23
  -25
  -26
  -27
  -28
  -29
  -31
  -32
  -33
  -35
  -36
  -37
  -39
  -40
  -42
  -44
  -45
  -47
  -49
  -51
  -53
  -56
  -58
Cash from investing activities, $m
  -28
  -32
  -36
  -40
  -45
  -50
  -54
  -59
  -65
  -71
  -76
  -82
  -88
  -96
  -102
  -109
  -117
  -124
  -131
  -140
  -148
  -157
  -167
  -175
  -185
  -196
  -207
  -218
  -230
  -242
Free cash flow, $m
  37
  63
  91
  122
  155
  192
  231
  272
  316
  362
  409
  459
  513
  568
  626
  686
  749
  814
  882
  953
  1,026
  1,103
  1,183
  1,265
  1,352
  1,442
  1,536
  1,634
  1,736
  1,843
Issuance/(repayment) of debt, $m
  57
  62
  68
  73
  79
  84
  89
  94
  99
  104
  109
  114
  118
  123
  128
  133
  139
  144
  150
  156
  162
  168
  175
  182
  190
  198
  206
  215
  224
  234
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  
  57
  62
  68
  73
  79
  84
  89
  94
  99
  104
  109
  114
  118
  123
  128
  133
  139
  144
  150
  156
  162
  168
  175
  182
  190
  198
  206
  215
  224
  234
Total cash flow (excl. dividends), $m
  94
  125
  159
  195
  234
  276
  320
  366
  415
  466
  517
  573
  631
  692
  754
  820
  888
  959
  1,032
  1,109
  1,188
  1,271
  1,358
  1,448
  1,542
  1,640
  1,742
  1,849
  1,960
  2,077
Retained Cash Flow (-), $m
  -21
  -24
  -26
  -28
  -30
  -32
  -34
  -36
  -38
  -39
  -41
  -43
  -45
  -47
  -49
  -51
  -53
  -55
  -57
  -59
  -61
  -64
  -66
  -69
  -72
  -75
  -78
  -82
  -85
  -89
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
  73
  101
  133
  167
  204
  244
  286
  330
  377
  426
  476
  530
  586
  645
  706
  769
  835
  904
  975
  1,050
  1,127
  1,207
  1,291
  1,379
  1,470
  1,565
  1,664
  1,767
  1,875
  1,988
Discount rate, %
  5.00
  5.25
  5.51
  5.79
  6.08
  6.38
  6.70
  7.04
  7.39
  7.76
  8.14
  8.55
  8.98
  9.43
  9.90
  10.39
  10.91
  11.46
  12.03
  12.63
  13.27
  13.93
  14.63
  15.36
  16.13
  16.93
  17.78
  18.67
  19.60
  20.58
PV of cash for distribution, $m
  69
  91
  113
  134
  152
  168
  182
  192
  199
  202
  201
  198
  192
  183
  171
  158
  144
  128
  113
  97
  82
  69
  56
  45
  35
  27
  20
  15
  10
  7
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

Commercial Vehicle Group, Inc. is a supplier of a range of cab-related products and systems. The Company operates through two segments: the Global Truck and Bus Segment (GTB Segment) and the Global Construction and Agriculture Segment (GCA Segment). The GTB Segment manufactures and sells products, which include Seats, Trim, sleeper boxes, cab structures, structural components and body panels, and mirrors and wiper systems. The GCA Segment manufactures and sells the products, which include Electronic wire harness assemblies and Seats, Wiper systems, Office seating, and Aftermarket seats and components. It supplies products for the commercial vehicle market, including the medium-and heavy-duty truck market, the medium-and heavy-construction vehicle market, and the military, bus, agriculture, mining, industrial equipment and off-road recreational markets. It has manufacturing operations in the United States, Mexico, the United Kingdom, Czech Republic, Ukraine, China, India and Australia.

FINANCIAL RATIOS  of  Commercial Vehicle Group, Inc. (CVGI)

Valuation Ratios
P/E Ratio 30.5
Price to Sales 0.3
Price to Book 3.1
Price to Tangible Book
Price to Cash Flow 4.4
Price to Free Cash Flow 5.6
Growth Rates
Sales Growth Rate -19.8%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate -26.7%
Cap. Spend. - 3 Yr. Gr. Rate -3.3%
Financial Strength
Quick Ratio NaN
Current Ratio 0.1
LT Debt to Equity 342.6%
Total Debt to Equity 342.6%
Interest Coverage 1
Management Effectiveness
Return On Assets 6%
Ret/ On Assets - 3 Yr. Avg. 4.7%
Return On Total Capital 2.3%
Ret/ On T. Cap. - 3 Yr. Avg. 2.4%
Return On Equity 10.4%
Return On Equity - 3 Yr. Avg. 11.7%
Asset Turnover 1.5
Profitability Ratios
Gross Margin 13.1%
Gross Margin - 3 Yr. Avg. 13.2%
EBITDA Margin 6.3%
EBITDA Margin - 3 Yr. Avg. 6.4%
Operating Margin 3.8%
Oper. Margin - 3 Yr. Avg. 4.1%
Pre-Tax Margin 1.1%
Pre-Tax Margin - 3 Yr. Avg. 1.6%
Net Profit Margin 1.1%
Net Profit Margin - 3 Yr. Avg. 1%
Effective Tax Rate 0%
Eff/ Tax Rate - 3 Yr. Avg. 32.4%
Payout Ratio 0%

CVGI stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the CVGI stock intrinsic value calculation we used $898 million for the last fiscal year's total revenue generated by Commercial Vehicle Group, Inc.. The default revenue input number comes from 0001 income statement of Commercial Vehicle Group, 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 CVGI stock valuation model: a) initial revenue growth rate of 18.7% 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%, whose default value for CVGI is calculated based on our internal credit rating of Commercial Vehicle Group, 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 Commercial Vehicle Group, 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 CVGI stock the variable cost ratio is equal to 74.6%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $165 million in the base year in the intrinsic value calculation for CVGI 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 8.9% for Commercial Vehicle Group, Inc..

Corporate tax rate of 27% is the nominal tax rate for Commercial Vehicle Group, 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 CVGI 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 CVGI are equal to 8.4%.

Life of production assets of 5.6 years is the average useful life of capital assets used in Commercial Vehicle Group, 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 CVGI is equal to 13.4%. 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 - $115.038 million for Commercial Vehicle Group, 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 31.273 million for Commercial Vehicle Group, 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 Commercial Vehicle Group, Inc. at the current share price and the inputted number of shares is $0.2 billion.

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