Intrinsic value of JELD-WEN Holding, Inc. - JELD

Previous Close

$20.84

  Intrinsic Value

$27.49

stock screener

  Rating & Target

buy

+32%

Previous close

$20.84

 
Intrinsic value

$27.49

 
Up/down potential

+32%

 
Rating

buy

We calculate the intrinsic value of JELD 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 2.1

 

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, %
  11.80
  11.12
  10.51
  9.96
  9.46
  9.02
  8.61
  8.25
  7.93
  7.63
  7.37
  7.13
  6.92
  6.73
  6.56
  6.40
  6.26
  6.13
  6.02
  5.92
  5.83
  5.74
  5.67
  5.60
  5.54
  5.49
  5.44
  5.40
  5.36
  5.32
Revenue, $m
  4,860
  5,400
  5,968
  6,562
  7,183
  7,831
  8,505
  9,207
  9,937
  10,695
  11,484
  12,303
  13,154
  14,039
  14,960
  15,917
  16,914
  17,951
  19,032
  20,158
  21,333
  22,558
  23,837
  25,173
  26,568
  28,026
  29,551
  31,145
  32,813
  34,559
Variable operating expenses, $m
  4,510
  5,003
  5,520
  6,061
  6,627
  7,217
  7,832
  8,472
  9,137
  9,828
  10,466
  11,212
  11,988
  12,795
  13,634
  14,506
  15,414
  16,360
  17,345
  18,371
  19,442
  20,558
  21,724
  22,941
  24,213
  25,541
  26,931
  28,384
  29,904
  31,495
Fixed operating expenses, $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 operating expenses, $m
  4,510
  5,003
  5,520
  6,061
  6,627
  7,217
  7,832
  8,472
  9,137
  9,828
  10,466
  11,212
  11,988
  12,795
  13,634
  14,506
  15,414
  16,360
  17,345
  18,371
  19,442
  20,558
  21,724
  22,941
  24,213
  25,541
  26,931
  28,384
  29,904
  31,495
Operating income, $m
  350
  398
  448
  501
  556
  613
  673
  735
  800
  867
  1,018
  1,091
  1,166
  1,245
  1,326
  1,411
  1,500
  1,591
  1,687
  1,787
  1,891
  2,000
  2,113
  2,232
  2,355
  2,485
  2,620
  2,761
  2,909
  3,064
EBITDA, $m
  537
  596
  659
  725
  793
  865
  939
  1,017
  1,097
  1,181
  1,268
  1,358
  1,452
  1,550
  1,652
  1,758
  1,868
  1,982
  2,101
  2,226
  2,356
  2,491
  2,632
  2,779
  2,934
  3,095
  3,263
  3,439
  3,623
  3,816
Interest expense (income), $m
  0
  80
  94
  110
  126
  143
  160
  178
  198
  217
  238
  260
  282
  305
  329
  354
  381
  408
  436
  465
  496
  528
  561
  596
  632
  670
  710
  751
  794
  839
  887
Earnings before tax, $m
  270
  303
  338
  375
  413
  453
  494
  538
  582
  629
  758
  809
  861
  915
  972
  1,031
  1,092
  1,156
  1,222
  1,291
  1,363
  1,439
  1,517
  1,600
  1,685
  1,775
  1,869
  1,967
  2,070
  2,177
Tax expense, $m
  73
  82
  91
  101
  112
  122
  134
  145
  157
  170
  205
  218
  232
  247
  262
  278
  295
  312
  330
  349
  368
  388
  410
  432
  455
  479
  505
  531
  559
  588
Net income, $m
  197
  221
  247
  274
  302
  331
  361
  392
  425
  459
  554
  590
  629
  668
  709
  752
  797
  844
  892
  943
  995
  1,050
  1,108
  1,168
  1,230
  1,296
  1,364
  1,436
  1,511
  1,589

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
  3,410
  3,790
  4,188
  4,605
  5,041
  5,495
  5,968
  6,461
  6,973
  7,506
  8,059
  8,634
  9,231
  9,852
  10,498
  11,170
  11,869
  12,597
  13,356
  14,146
  14,970
  15,830
  16,728
  17,665
  18,644
  19,667
  20,737
  21,856
  23,027
  24,252
Adjusted assets (=assets-cash), $m
  3,410
  3,790
  4,188
  4,605
  5,041
  5,495
  5,968
  6,461
  6,973
  7,506
  8,059
  8,634
  9,231
  9,852
  10,498
  11,170
  11,869
  12,597
  13,356
  14,146
  14,970
  15,830
  16,728
  17,665
  18,644
  19,667
  20,737
  21,856
  23,027
  24,252
Revenue / Adjusted assets
  1.425
  1.425
  1.425
  1.425
  1.425
  1.425
  1.425
  1.425
  1.425
  1.425
  1.425
  1.425
  1.425
  1.425
  1.425
  1.425
  1.425
  1.425
  1.425
  1.425
  1.425
  1.425
  1.425
  1.425
  1.425
  1.425
  1.425
  1.425
  1.425
  1.425
Average production assets, $m
  1,322
  1,469
  1,623
  1,785
  1,954
  2,130
  2,313
  2,504
  2,703
  2,909
  3,124
  3,346
  3,578
  3,819
  4,069
  4,329
  4,601
  4,883
  5,177
  5,483
  5,803
  6,136
  6,484
  6,847
  7,227
  7,623
  8,038
  8,471
  8,925
  9,400
Working capital, $m
  467
  518
  573
  630
  690
  752
  816
  884
  954
  1,027
  1,102
  1,181
  1,263
  1,348
  1,436
  1,528
  1,624
  1,723
  1,827
  1,935
  2,048
  2,166
  2,288
  2,417
  2,551
  2,691
  2,837
  2,990
  3,150
  3,318
Total debt, $m
  1,746
  2,029
  2,327
  2,639
  2,965
  3,305
  3,659
  4,027
  4,411
  4,809
  5,223
  5,653
  6,100
  6,564
  7,047
  7,550
  8,073
  8,617
  9,185
  9,776
  10,393
  11,036
  11,707
  12,408
  13,141
  13,906
  14,706
  15,543
  16,419
  17,335
Total liabilities, $m
  2,551
  2,835
  3,133
  3,445
  3,770
  4,110
  4,464
  4,833
  5,216
  5,614
  6,028
  6,458
  6,905
  7,369
  7,853
  8,355
  8,878
  9,423
  9,990
  10,581
  11,198
  11,841
  12,512
  13,214
  13,946
  14,711
  15,511
  16,348
  17,224
  18,140
Total equity, $m
  859
  955
  1,055
  1,160
  1,270
  1,385
  1,504
  1,628
  1,757
  1,891
  2,031
  2,176
  2,326
  2,483
  2,646
  2,815
  2,991
  3,175
  3,366
  3,565
  3,773
  3,989
  4,215
  4,452
  4,698
  4,956
  5,226
  5,508
  5,803
  6,111
Total liabilities and equity, $m
  3,410
  3,790
  4,188
  4,605
  5,040
  5,495
  5,968
  6,461
  6,973
  7,505
  8,059
  8,634
  9,231
  9,852
  10,499
  11,170
  11,869
  12,598
  13,356
  14,146
  14,971
  15,830
  16,727
  17,666
  18,644
  19,667
  20,737
  21,856
  23,027
  24,251
Debt-to-equity ratio
  2.030
  2.120
  2.210
  2.270
  2.330
  2.390
  2.430
  2.470
  2.510
  2.540
  2.570
  2.600
  2.620
  2.640
  2.660
  2.680
  2.700
  2.710
  2.730
  2.740
  2.750
  2.770
  2.780
  2.790
  2.800
  2.810
  2.810
  2.820
  2.830
  2.840
Adjusted equity ratio
  0.252
  0.252
  0.252
  0.252
  0.252
  0.252
  0.252
  0.252
  0.252
  0.252
  0.252
  0.252
  0.252
  0.252
  0.252
  0.252
  0.252
  0.252
  0.252
  0.252
  0.252
  0.252
  0.252
  0.252
  0.252
  0.252
  0.252
  0.252
  0.252
  0.252

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  197
  221
  247
  274
  302
  331
  361
  392
  425
  459
  554
  590
  629
  668
  709
  752
  797
  844
  892
  943
  995
  1,050
  1,108
  1,168
  1,230
  1,296
  1,364
  1,436
  1,511
  1,589
Depreciation, amort., depletion, $m
  187
  199
  211
  224
  237
  251
  266
  281
  297
  314
  250
  268
  286
  305
  326
  346
  368
  391
  414
  439
  464
  491
  519
  548
  578
  610
  643
  678
  714
  752
Funds from operations, $m
  384
  420
  458
  498
  539
  582
  627
  674
  722
  773
  804
  858
  915
  974
  1,035
  1,099
  1,165
  1,234
  1,306
  1,381
  1,459
  1,541
  1,626
  1,715
  1,808
  1,906
  2,007
  2,114
  2,225
  2,341
Change in working capital, $m
  49
  52
  54
  57
  60
  62
  65
  67
  70
  73
  76
  79
  82
  85
  88
  92
  96
  100
  104
  108
  113
  118
  123
  128
  134
  140
  146
  153
  160
  168
Cash from operations, $m
  335
  368
  404
  441
  479
  520
  562
  606
  652
  700
  728
  779
  833
  889
  947
  1,007
  1,069
  1,135
  1,202
  1,273
  1,347
  1,424
  1,504
  1,587
  1,675
  1,766
  1,861
  1,961
  2,065
  2,174
Maintenance CAPEX, $m
  -95
  -106
  -118
  -130
  -143
  -156
  -170
  -185
  -200
  -216
  -233
  -250
  -268
  -286
  -305
  -326
  -346
  -368
  -391
  -414
  -439
  -464
  -491
  -519
  -548
  -578
  -610
  -643
  -678
  -714
New CAPEX, $m
  -140
  -147
  -154
  -162
  -169
  -176
  -183
  -191
  -199
  -206
  -214
  -223
  -232
  -241
  -250
  -260
  -271
  -282
  -294
  -306
  -319
  -333
  -348
  -363
  -379
  -397
  -415
  -434
  -454
  -475
Cash from investing activities, $m
  -235
  -253
  -272
  -292
  -312
  -332
  -353
  -376
  -399
  -422
  -447
  -473
  -500
  -527
  -555
  -586
  -617
  -650
  -685
  -720
  -758
  -797
  -839
  -882
  -927
  -975
  -1,025
  -1,077
  -1,132
  -1,189
Free cash flow, $m
  100
  115
  132
  149
  168
  188
  209
  231
  254
  278
  281
  307
  334
  362
  391
  421
  452
  484
  518
  553
  589
  626
  665
  705
  747
  791
  836
  884
  933
  985
Issuance/(repayment) of debt, $m
  268
  284
  298
  312
  326
  340
  354
  368
  383
  398
  414
  430
  447
  465
  483
  503
  523
  545
  567
  591
  617
  643
  671
  701
  732
  765
  800
  837
  876
  916
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  
  268
  284
  298
  312
  326
  340
  354
  368
  383
  398
  414
  430
  447
  465
  483
  503
  523
  545
  567
  591
  617
  643
  671
  701
  732
  765
  800
  837
  876
  916
Total cash flow (excl. dividends), $m
  368
  399
  430
  461
  494
  528
  563
  599
  637
  676
  695
  737
  781
  826
  874
  923
  975
  1,029
  1,085
  1,144
  1,205
  1,269
  1,336
  1,406
  1,480
  1,556
  1,637
  1,721
  1,809
  1,901
Retained Cash Flow (-), $m
  -92
  -96
  -100
  -105
  -110
  -115
  -119
  -124
  -129
  -134
  -139
  -145
  -151
  -157
  -163
  -169
  -176
  -183
  -191
  -199
  -208
  -217
  -226
  -236
  -247
  -258
  -270
  -282
  -295
  -309
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
  276
  304
  329
  356
  384
  413
  443
  475
  508
  542
  555
  592
  630
  670
  711
  754
  799
  845
  894
  945
  997
  1,053
  1,110
  1,170
  1,233
  1,298
  1,367
  1,439
  1,514
  1,593
Discount rate, %
  9.00
  9.45
  9.92
  10.42
  10.94
  11.49
  12.06
  12.66
  13.30
  13.96
  14.66
  15.39
  16.16
  16.97
  17.82
  18.71
  19.65
  20.63
  21.66
  22.74
  23.88
  25.07
  26.33
  27.64
  29.03
  30.48
  32.00
  33.60
  35.28
  37.05
PV of cash for distribution, $m
  253
  253
  248
  239
  228
  215
  200
  183
  165
  147
  123
  106
  90
  75
  61
  48
  38
  29
  22
  16
  11
  8
  5
  3
  2
  1
  1
  0
  0
  0
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

JELD-WEN Holding, Inc. is a door and window manufacturer. The Company designs, produces and distributes a range of interior and exterior doors, wood, vinyl and aluminum windows, and related products for use in the new construction and repair and remodeling, of residential homes, and to an extent, non-residential buildings. It operates in three segments: North America, Europe and Australasia. It markets its products under the JELD-WEN brand, along with various regional brands, such as Swedoor and DANA in Europe and Corinthian, Stegbar and Trend in Australia. It operates over 110 manufacturing facilities in approximately 20 countries, located primarily in North America, Europe and Australia. It provides a portfolio of interior and exterior doors, windows, and related products, manufactured from a range of wood, metal, and composite materials. It manufactures wood, vinyl and aluminum windows in North America, wood and aluminum windows in Australia, and wood windows in the United Kingdom.

FINANCIAL RATIOS  of  JELD-WEN Holding, Inc. (JELD)

Valuation Ratios
P/E Ratio 1.1
Price to Sales 0.1
Price to Book 1.8
Price to Tangible Book
Price to Cash Flow 1.9
Price to Free Cash Flow 3.1
Growth Rates
Sales Growth Rate 8.5%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate 2.6%
Cap. Spend. - 3 Yr. Gr. Rate -1.4%
Financial Strength
Quick Ratio 5
Current Ratio 0.1
LT Debt to Equity 772.9%
Total Debt to Equity 782.6%
Interest Coverage 0
Management Effectiveness
Return On Assets 15.2%
Ret/ On Assets - 3 Yr. Avg. 3.9%
Return On Total Capital 21.5%
Ret/ On T. Cap. - 3 Yr. Avg. 5.3%
Return On Equity 156.7%
Return On Equity - 3 Yr. Avg. 50.3%
Asset Turnover 1.6
Profitability Ratios
Gross Margin 21.8%
Gross Margin - 3 Yr. Avg. 19.4%
EBITDA Margin 6.5%
EBITDA Margin - 3 Yr. Avg. 4.3%
Operating Margin 5.6%
Oper. Margin - 3 Yr. Avg. 3.3%
Pre-Tax Margin 3.6%
Pre-Tax Margin - 3 Yr. Avg. 1.5%
Net Profit Margin 9.8%
Net Profit Margin - 3 Yr. Avg. 3.4%
Effective Tax Rate -171.2%
Eff/ Tax Rate - 3 Yr. Avg. -69.7%
Payout Ratio 0%

JELD stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the JELD stock intrinsic value calculation we used $4347 million for the last fiscal year's total revenue generated by JELD-WEN Holding, Inc.. The default revenue input number comes from 0001 income statement of JELD-WEN Holding, 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 JELD stock valuation model: a) initial revenue growth rate of 11.8% 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 9%, whose default value for JELD is calculated based on our internal credit rating of JELD-WEN Holding, 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 JELD-WEN Holding, 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 JELD stock the variable cost ratio is equal to 93%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $0 million in the base year in the intrinsic value calculation for JELD 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 JELD-WEN Holding, Inc..

Corporate tax rate of 27% is the nominal tax rate for JELD-WEN Holding, 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 JELD 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 JELD are equal to 27.2%.

Life of production assets of 12.5 years is the average useful life of capital assets used in JELD-WEN Holding, 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 JELD is equal to 9.6%. 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 - $767.824 million for JELD-WEN Holding, 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 100.800 million for JELD-WEN Holding, 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 JELD-WEN Holding, Inc. at the current share price and the inputted number of shares is $2.1 billion.

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