Intrinsic value of Maxar Technologies - MAXR

Previous Close

$19.37

  Intrinsic Value

$56.61

stock screener

  Rating & Target

str. buy

+192%

Previous close

$19.37

 
Intrinsic value

$56.61

 
Up/down potential

+192%

 
Rating

str. buy

We calculate the intrinsic value of MAXR 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 1.1

 

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, %
  4.70
  4.73
  4.76
  4.78
  4.80
  4.82
  4.84
  4.86
  4.87
  4.88
  4.90
  4.91
  4.92
  4.92
  4.93
  4.94
  4.94
  4.95
  4.95
  4.96
  4.96
  4.97
  4.97
  4.97
  4.98
  4.98
  4.98
  4.98
  4.98
  4.99
Revenue, $m
  1,708
  1,789
  1,874
  1,963
  2,058
  2,157
  2,261
  2,371
  2,487
  2,608
  2,736
  2,870
  3,011
  3,159
  3,315
  3,479
  3,651
  3,831
  4,021
  4,221
  4,430
  4,650
  4,881
  5,124
  5,379
  5,647
  5,928
  6,224
  6,534
  6,860
Variable operating expenses, $m
  1,502
  1,554
  1,608
  1,665
  1,725
  1,789
  1,855
  1,925
  1,999
  2,077
  1,745
  1,831
  1,921
  2,015
  2,115
  2,219
  2,329
  2,444
  2,565
  2,693
  2,826
  2,967
  3,114
  3,269
  3,432
  3,602
  3,782
  3,970
  4,168
  4,376
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
  1,502
  1,554
  1,608
  1,665
  1,725
  1,789
  1,855
  1,925
  1,999
  2,077
  1,745
  1,831
  1,921
  2,015
  2,115
  2,219
  2,329
  2,444
  2,565
  2,693
  2,826
  2,967
  3,114
  3,269
  3,432
  3,602
  3,782
  3,970
  4,168
  4,376
Operating income, $m
  206
  235
  266
  298
  332
  368
  406
  446
  487
  531
  990
  1,039
  1,090
  1,144
  1,200
  1,259
  1,322
  1,387
  1,456
  1,528
  1,604
  1,684
  1,767
  1,855
  1,948
  2,044
  2,146
  2,253
  2,366
  2,484
EBITDA, $m
  725
  759
  795
  833
  873
  915
  959
  1,006
  1,055
  1,106
  1,161
  1,218
  1,277
  1,340
  1,406
  1,476
  1,549
  1,625
  1,706
  1,791
  1,879
  1,973
  2,071
  2,174
  2,282
  2,396
  2,515
  2,640
  2,772
  2,910
Interest expense (income), $m
  0
  167
  179
  192
  205
  219
  233
  248
  265
  281
  299
  318
  338
  358
  380
  403
  427
  452
  478
  506
  535
  566
  598
  632
  668
  705
  744
  785
  829
  874
  922
Earnings before tax, $m
  38
  55
  74
  93
  114
  135
  157
  181
  206
  232
  673
  702
  732
  764
  798
  833
  870
  909
  950
  993
  1,038
  1,085
  1,135
  1,188
  1,243
  1,300
  1,361
  1,425
  1,491
  1,562
Tax expense, $m
  10
  15
  20
  25
  31
  36
  43
  49
  56
  63
  182
  189
  198
  206
  215
  225
  235
  245
  256
  268
  280
  293
  307
  321
  335
  351
  367
  385
  403
  422
Net income, $m
  28
  40
  54
  68
  83
  98
  115
  132
  150
  170
  491
  512
  534
  558
  582
  608
  635
  663
  693
  725
  758
  792
  829
  867
  907
  949
  993
  1,040
  1,089
  1,140

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
  6,971
  7,301
  7,648
  8,014
  8,398
  8,804
  9,230
  9,678
  10,149
  10,645
  11,166
  11,714
  12,290
  12,895
  13,531
  14,199
  14,901
  15,638
  16,413
  17,227
  18,082
  18,981
  19,924
  20,915
  21,956
  23,049
  24,197
  25,402
  26,668
  27,998
Adjusted assets (=assets-cash), $m
  6,971
  7,301
  7,648
  8,014
  8,398
  8,804
  9,230
  9,678
  10,149
  10,645
  11,166
  11,714
  12,290
  12,895
  13,531
  14,199
  14,901
  15,638
  16,413
  17,227
  18,082
  18,981
  19,924
  20,915
  21,956
  23,049
  24,197
  25,402
  26,668
  27,998
Revenue / Adjusted assets
  0.245
  0.245
  0.245
  0.245
  0.245
  0.245
  0.245
  0.245
  0.245
  0.245
  0.245
  0.245
  0.245
  0.245
  0.245
  0.245
  0.245
  0.245
  0.245
  0.245
  0.245
  0.245
  0.245
  0.245
  0.245
  0.245
  0.245
  0.245
  0.245
  0.245
Average production assets, $m
  2,092
  2,191
  2,295
  2,405
  2,521
  2,642
  2,770
  2,905
  3,046
  3,195
  3,351
  3,516
  3,688
  3,870
  4,061
  4,261
  4,472
  4,693
  4,926
  5,170
  5,427
  5,697
  5,980
  6,277
  6,589
  6,917
  7,262
  7,624
  8,004
  8,403
Working capital, $m
  -123
  -129
  -135
  -141
  -148
  -155
  -163
  -171
  -179
  -188
  -197
  -207
  -217
  -227
  -239
  -250
  -263
  -276
  -290
  -304
  -319
  -335
  -351
  -369
  -387
  -407
  -427
  -448
  -470
  -494
Total debt, $m
  3,322
  3,552
  3,795
  4,050
  4,318
  4,601
  4,899
  5,211
  5,541
  5,886
  6,250
  6,633
  7,034
  7,457
  7,901
  8,367
  8,857
  9,372
  9,913
  10,481
  11,078
  11,705
  12,363
  13,055
  13,781
  14,544
  15,346
  16,187
  17,071
  17,999
Total liabilities, $m
  4,866
  5,096
  5,338
  5,593
  5,862
  6,145
  6,442
  6,755
  7,084
  7,430
  7,794
  8,176
  8,578
  9,001
  9,444
  9,911
  10,401
  10,916
  11,456
  12,025
  12,622
  13,248
  13,907
  14,599
  15,325
  16,088
  16,889
  17,731
  18,615
  19,543
Total equity, $m
  2,105
  2,205
  2,310
  2,420
  2,536
  2,659
  2,787
  2,923
  3,065
  3,215
  3,372
  3,538
  3,711
  3,894
  4,086
  4,288
  4,500
  4,723
  4,957
  5,203
  5,461
  5,732
  6,017
  6,316
  6,631
  6,961
  7,307
  7,671
  8,054
  8,455
Total liabilities and equity, $m
  6,971
  7,301
  7,648
  8,013
  8,398
  8,804
  9,229
  9,678
  10,149
  10,645
  11,166
  11,714
  12,289
  12,895
  13,530
  14,199
  14,901
  15,639
  16,413
  17,228
  18,083
  18,980
  19,924
  20,915
  21,956
  23,049
  24,196
  25,402
  26,669
  27,998
Debt-to-equity ratio
  1.580
  1.610
  1.640
  1.670
  1.700
  1.730
  1.760
  1.780
  1.810
  1.830
  1.850
  1.870
  1.900
  1.910
  1.930
  1.950
  1.970
  1.980
  2.000
  2.010
  2.030
  2.040
  2.050
  2.070
  2.080
  2.090
  2.100
  2.110
  2.120
  2.130
Adjusted equity ratio
  0.302
  0.302
  0.302
  0.302
  0.302
  0.302
  0.302
  0.302
  0.302
  0.302
  0.302
  0.302
  0.302
  0.302
  0.302
  0.302
  0.302
  0.302
  0.302
  0.302
  0.302
  0.302
  0.302
  0.302
  0.302
  0.302
  0.302
  0.302
  0.302
  0.302

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  28
  40
  54
  68
  83
  98
  115
  132
  150
  170
  491
  512
  534
  558
  582
  608
  635
  663
  693
  725
  758
  792
  829
  867
  907
  949
  993
  1,040
  1,089
  1,140
Depreciation, amort., depletion, $m
  519
  524
  529
  535
  541
  547
  553
  560
  567
  575
  170
  178
  187
  196
  206
  216
  227
  238
  250
  262
  275
  289
  304
  319
  334
  351
  369
  387
  406
  427
Funds from operations, $m
  547
  564
  583
  603
  624
  645
  668
  692
  718
  745
  661
  691
  722
  754
  788
  824
  862
  902
  943
  987
  1,033
  1,082
  1,132
  1,186
  1,242
  1,300
  1,362
  1,427
  1,495
  1,567
Change in working capital, $m
  -6
  -6
  -6
  -6
  -7
  -7
  -8
  -8
  -8
  -9
  -9
  -10
  -10
  -11
  -11
  -12
  -12
  -13
  -14
  -14
  -15
  -16
  -17
  -17
  -18
  -19
  -20
  -21
  -22
  -23
Cash from operations, $m
  552
  570
  589
  609
  630
  653
  676
  700
  726
  753
  670
  700
  732
  765
  800
  836
  874
  915
  957
  1,002
  1,048
  1,097
  1,149
  1,203
  1,260
  1,320
  1,382
  1,448
  1,517
  1,590
Maintenance CAPEX, $m
  -101
  -106
  -111
  -117
  -122
  -128
  -134
  -141
  -147
  -155
  -162
  -170
  -178
  -187
  -196
  -206
  -216
  -227
  -238
  -250
  -262
  -275
  -289
  -304
  -319
  -334
  -351
  -369
  -387
  -406
New CAPEX, $m
  -95
  -99
  -104
  -110
  -116
  -122
  -128
  -135
  -141
  -149
  -156
  -164
  -173
  -182
  -191
  -201
  -211
  -221
  -233
  -244
  -257
  -270
  -283
  -297
  -312
  -328
  -345
  -362
  -380
  -399
Cash from investing activities, $m
  -196
  -205
  -215
  -227
  -238
  -250
  -262
  -276
  -288
  -304
  -318
  -334
  -351
  -369
  -387
  -407
  -427
  -448
  -471
  -494
  -519
  -545
  -572
  -601
  -631
  -662
  -696
  -731
  -767
  -805
Free cash flow, $m
  356
  365
  374
  383
  393
  403
  414
  425
  437
  450
  352
  366
  380
  396
  412
  429
  447
  466
  486
  507
  529
  552
  577
  602
  629
  657
  687
  718
  750
  785
Issuance/(repayment) of debt, $m
  222
  230
  242
  255
  269
  283
  297
  313
  329
  346
  364
  382
  402
  422
  444
  466
  490
  515
  541
  568
  597
  627
  659
  692
  726
  763
  801
  842
  884
  928
Issuance/(repurchase) of shares, $m
  64
  59
  51
  42
  33
  24
  14
  3
  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  
  286
  289
  293
  297
  302
  307
  311
  316
  329
  346
  364
  382
  402
  422
  444
  466
  490
  515
  541
  568
  597
  627
  659
  692
  726
  763
  801
  842
  884
  928
Total cash flow (excl. dividends), $m
  642
  654
  667
  681
  695
  710
  725
  741
  766
  796
  715
  748
  782
  818
  856
  896
  937
  981
  1,027
  1,075
  1,126
  1,179
  1,235
  1,294
  1,355
  1,420
  1,488
  1,559
  1,634
  1,713
Retained Cash Flow (-), $m
  -92
  -100
  -105
  -110
  -116
  -122
  -129
  -135
  -142
  -150
  -157
  -165
  -174
  -183
  -192
  -202
  -212
  -223
  -234
  -246
  -258
  -271
  -285
  -299
  -314
  -330
  -347
  -364
  -382
  -402
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
  550
  555
  562
  570
  579
  587
  596
  606
  624
  646
  558
  583
  608
  636
  664
  694
  725
  758
  793
  830
  868
  908
  950
  995
  1,041
  1,090
  1,141
  1,195
  1,252
  1,311
Discount rate, %
  9.90
  10.40
  10.91
  11.46
  12.03
  12.64
  13.27
  13.93
  14.63
  15.36
  16.13
  16.93
  17.78
  18.67
  19.60
  20.58
  21.61
  22.69
  23.83
  25.02
  26.27
  27.58
  28.96
  30.41
  31.93
  33.52
  35.20
  36.96
  38.81
  40.75
PV of cash for distribution, $m
  501
  455
  412
  369
  328
  288
  249
  213
  183
  155
  108
  89
  73
  58
  45
  35
  26
  19
  14
  10
  6
  4
  3
  2
  1
  1
  0
  0
  0
  0
Current shareholders' claim on cash, %
  95.7
  92.0
  89.0
  86.8
  85.1
  84.0
  83.3
  83.2
  83.2
  83.2
  83.2
  83.2
  83.2
  83.2
  83.2
  83.2
  83.2
  83.2
  83.2
  83.2
  83.2
  83.2
  83.2
  83.2
  83.2
  83.2
  83.2
  83.2
  83.2
  83.2

FINANCIAL RATIOS  of  Maxar Technologies (MAXR)

Valuation Ratios
P/E Ratio 0
Price to Sales 0
Price to Book 0
Price to Tangible Book
Price to Cash Flow 0
Price to Free Cash Flow 0
Growth Rates
Sales Growth Rate -100%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate NaN%
Cap. Spend. - 3 Yr. Gr. Rate NaN%
Financial Strength
Quick Ratio NaN
Current Ratio NaN
LT Debt to Equity 0%
Total Debt to Equity 0%
Interest Coverage 0
Management Effectiveness
Return On Assets 0%
Ret/ On Assets - 3 Yr. Avg. 0%
Return On Total Capital 0%
Ret/ On T. Cap. - 3 Yr. Avg. 0%
Return On Equity 0%
Return On Equity - 3 Yr. Avg. 0%
Asset Turnover 0
Profitability Ratios
Gross Margin 0%
Gross Margin - 3 Yr. Avg. 0%
EBITDA Margin 0%
EBITDA Margin - 3 Yr. Avg. 0%
Operating Margin 0%
Oper. Margin - 3 Yr. Avg. 0%
Pre-Tax Margin 0%
Pre-Tax Margin - 3 Yr. Avg. 0%
Net Profit Margin 0%
Net Profit Margin - 3 Yr. Avg. 0%
Effective Tax Rate 0%
Eff/ Tax Rate - 3 Yr. Avg. 0%
Payout Ratio 0%

MAXR stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the MAXR stock intrinsic value calculation we used $1631.2 million for the last fiscal year's total revenue generated by Maxar Technologies. The default revenue input number comes from 0001 income statement of Maxar Technologies. 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 MAXR stock valuation model: a) initial revenue growth rate of 4.7% 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 9.9%, whose default value for MAXR is calculated based on our internal credit rating of Maxar Technologies, 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 Maxar Technologies.
    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 MAXR stock the variable cost ratio is equal to 89.1%.

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 MAXR 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 Maxar Technologies.

Corporate tax rate of 27% is the nominal tax rate for Maxar Technologies. 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 MAXR 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 MAXR are equal to 122.5%.

Life of production assets of 19.7 years is the average useful life of capital assets used in Maxar Technologies 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 MAXR is equal to -7.2%. 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 - $2013.6 million for Maxar Technologies - 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 56.212 million for Maxar Technologies 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 Maxar Technologies at the current share price and the inputted number of shares is $1.1 billion.

COMPANY NEWS

▶ Maxar Technologies Announces Recent Insider Purchases   [Nov-12-18 06:00AM  PR Newswire]
▶ Maxar Technologies Stock Suffers Multiple Downgrades   [Nov-01-18 02:19PM  Motley Fool]
▶ Treat Aurora Cannabis Stock Normally at Your Own Peril   [Oct-26-18 11:25AM  InvestorPlace]
▶ Maxar Technologies Advances Planned U.S. Domestication   [Oct-09-18 07:00AM  PR Newswire]
▶ NASA Hires Maxar to Study Manufacturing in Space   [Sep-16-18 09:13AM  Motley Fool]
▶ Financial detective Ben Axler describes 'the perfect short'   [Aug-28-18 08:17AM  Yahoo Finance]
▶ 8 Bargain Stocks With Big Upside Potential   [Aug-03-18 12:35PM  Investopedia]

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