Intrinsic value of Maxar Technologies Inc. - MAXR

Previous Close

$4.53

  Intrinsic Value

$24.28

stock screener

  Rating & Target

str. buy

+436%

Previous close

$4.53

 
Intrinsic value

$24.28

 
Up/down potential

+436%

 
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 0.3

 

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, %
  31.30
  28.67
  26.30
  24.17
  22.26
  20.53
  18.98
  17.58
  16.32
  15.19
  14.17
  13.25
  12.43
  11.69
  11.02
  10.41
  9.87
  9.39
  8.95
  8.55
  8.20
  7.88
  7.59
  7.33
  7.10
  6.89
  6.70
  6.53
  6.38
  6.24
Revenue, $m
  2,811
  3,617
  4,568
  5,673
  6,935
  8,359
  9,945
  11,694
  13,602
  15,668
  17,889
  20,260
  22,777
  25,439
  28,241
  31,183
  34,262
  37,477
  40,831
  44,323
  47,956
  51,734
  55,661
  59,741
  63,981
  68,388
  72,970
  77,734
  82,691
  87,850
Variable operating expenses, $m
  2,726
  3,422
  4,244
  5,198
  6,288
  7,518
  8,888
  10,398
  12,046
  13,831
  15,450
  17,498
  19,672
  21,971
  24,391
  26,932
  29,591
  32,368
  35,264
  38,280
  41,418
  44,681
  48,072
  51,597
  55,259
  59,065
  63,022
  67,137
  71,418
  75,874
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
  2,726
  3,422
  4,244
  5,198
  6,288
  7,518
  8,888
  10,398
  12,046
  13,831
  15,450
  17,498
  19,672
  21,971
  24,391
  26,932
  29,591
  32,368
  35,264
  38,280
  41,418
  44,681
  48,072
  51,597
  55,259
  59,065
  63,022
  67,137
  71,418
  75,874
Operating income, $m
  85
  195
  325
  475
  647
  841
  1,058
  1,296
  1,556
  1,838
  2,439
  2,762
  3,105
  3,468
  3,850
  4,251
  4,671
  5,109
  5,566
  6,042
  6,538
  7,053
  7,588
  8,144
  8,722
  9,323
  9,948
  10,597
  11,273
  11,976
EBITDA, $m
  738
  950
  1,199
  1,489
  1,821
  2,194
  2,611
  3,070
  3,571
  4,113
  4,696
  5,318
  5,979
  6,678
  7,414
  8,186
  8,994
  9,838
  10,719
  11,635
  12,589
  13,581
  14,612
  15,683
  16,796
  17,953
  19,156
  20,406
  21,707
  23,062
Interest expense (income), $m
  0
  204
  295
  405
  535
  686
  858
  1,052
  1,268
  1,507
  1,767
  2,049
  2,351
  2,675
  3,018
  3,381
  3,763
  4,164
  4,584
  5,022
  5,479
  5,955
  6,451
  6,966
  7,501
  8,058
  8,636
  9,237
  9,861
  10,511
  11,187
Earnings before tax, $m
  -119
  -101
  -81
  -60
  -38
  -17
  6
  28
  49
  71
  390
  411
  431
  450
  469
  488
  507
  526
  544
  563
  582
  602
  622
  643
  665
  687
  711
  736
  762
  789
Tax expense, $m
  0
  0
  0
  0
  0
  0
  2
  7
  13
  19
  105
  111
  116
  122
  127
  132
  137
  142
  147
  152
  157
  163
  168
  174
  179
  186
  192
  199
  206
  213
Net income, $m
  -119
  -101
  -81
  -60
  -38
  -17
  4
  20
  36
  52
  285
  300
  314
  329
  343
  356
  370
  384
  397
  411
  425
  439
  454
  469
  485
  502
  519
  537
  556
  576

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
  6,568
  8,451
  10,674
  13,254
  16,204
  19,531
  23,237
  27,322
  31,781
  36,608
  41,796
  47,335
  53,218
  59,437
  65,985
  72,857
  80,050
  87,564
  95,399
  103,558
  112,047
  120,874
  130,048
  139,582
  149,489
  159,786
  170,490
  181,622
  193,203
  205,257
Adjusted assets (=assets-cash), $m
  6,568
  8,451
  10,674
  13,254
  16,204
  19,531
  23,237
  27,322
  31,781
  36,608
  41,796
  47,335
  53,218
  59,437
  65,985
  72,857
  80,050
  87,564
  95,399
  103,558
  112,047
  120,874
  130,048
  139,582
  149,489
  159,786
  170,490
  181,622
  193,203
  205,257
Revenue / Adjusted assets
  0.428
  0.428
  0.428
  0.428
  0.428
  0.428
  0.428
  0.428
  0.428
  0.428
  0.428
  0.428
  0.428
  0.428
  0.428
  0.428
  0.428
  0.428
  0.428
  0.428
  0.428
  0.428
  0.428
  0.428
  0.428
  0.428
  0.428
  0.428
  0.428
  0.428
Average production assets, $m
  3,441
  4,427
  5,592
  6,944
  8,489
  10,232
  12,173
  14,313
  16,649
  19,178
  21,896
  24,798
  27,879
  31,137
  34,567
  38,168
  41,936
  45,872
  49,977
  54,251
  58,698
  63,322
  68,128
  73,123
  78,313
  83,707
  89,315
  95,147
  101,214
  107,528
Working capital, $m
  -301
  -387
  -489
  -607
  -742
  -894
  -1,064
  -1,251
  -1,455
  -1,677
  -1,914
  -2,168
  -2,437
  -2,722
  -3,022
  -3,337
  -3,666
  -4,010
  -4,369
  -4,743
  -5,131
  -5,536
  -5,956
  -6,392
  -6,846
  -7,318
  -7,808
  -8,318
  -8,848
  -9,400
Total debt, $m
  4,410
  6,050
  7,986
  10,233
  12,803
  15,700
  18,928
  22,486
  26,370
  30,575
  35,093
  39,918
  45,042
  50,458
  56,162
  62,147
  68,413
  74,957
  81,781
  88,888
  96,282
  103,970
  111,961
  120,265
  128,894
  137,863
  147,186
  156,882
  166,969
  177,468
Total liabilities, $m
  5,721
  7,361
  9,297
  11,544
  14,114
  17,011
  20,239
  23,797
  27,681
  31,886
  36,404
  41,229
  46,353
  51,769
  57,473
  63,458
  69,724
  76,268
  83,092
  90,199
  97,593
  105,281
  113,272
  121,576
  130,205
  139,174
  148,497
  158,193
  168,280
  178,779
Total equity, $m
  847
  1,090
  1,377
  1,710
  2,090
  2,519
  2,998
  3,525
  4,100
  4,722
  5,392
  6,106
  6,865
  7,667
  8,512
  9,399
  10,326
  11,296
  12,306
  13,359
  14,454
  15,593
  16,776
  18,006
  19,284
  20,612
  21,993
  23,429
  24,923
  26,478
Total liabilities and equity, $m
  6,568
  8,451
  10,674
  13,254
  16,204
  19,530
  23,237
  27,322
  31,781
  36,608
  41,796
  47,335
  53,218
  59,436
  65,985
  72,857
  80,050
  87,564
  95,398
  103,558
  112,047
  120,874
  130,048
  139,582
  149,489
  159,786
  170,490
  181,622
  193,203
  205,257
Debt-to-equity ratio
  5.200
  5.550
  5.800
  5.990
  6.120
  6.230
  6.310
  6.380
  6.430
  6.470
  6.510
  6.540
  6.560
  6.580
  6.600
  6.610
  6.620
  6.640
  6.650
  6.650
  6.660
  6.670
  6.670
  6.680
  6.680
  6.690
  6.690
  6.700
  6.700
  6.700
Adjusted equity ratio
  0.129
  0.129
  0.129
  0.129
  0.129
  0.129
  0.129
  0.129
  0.129
  0.129
  0.129
  0.129
  0.129
  0.129
  0.129
  0.129
  0.129
  0.129
  0.129
  0.129
  0.129
  0.129
  0.129
  0.129
  0.129
  0.129
  0.129
  0.129
  0.129
  0.129

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  -119
  -101
  -81
  -60
  -38
  -17
  4
  20
  36
  52
  285
  300
  314
  329
  343
  356
  370
  384
  397
  411
  425
  439
  454
  469
  485
  502
  519
  537
  556
  576
Depreciation, amort., depletion, $m
  653
  755
  875
  1,014
  1,173
  1,353
  1,553
  1,774
  2,015
  2,275
  2,257
  2,556
  2,874
  3,210
  3,564
  3,935
  4,323
  4,729
  5,152
  5,593
  6,051
  6,528
  7,024
  7,538
  8,074
  8,630
  9,208
  9,809
  10,434
  11,085
Funds from operations, $m
  534
  654
  794
  954
  1,135
  1,337
  1,557
  1,794
  2,051
  2,327
  2,542
  2,856
  3,189
  3,539
  3,906
  4,291
  4,693
  5,113
  5,550
  6,004
  6,476
  6,967
  7,478
  8,008
  8,559
  9,131
  9,727
  10,346
  10,991
  11,662
Change in working capital, $m
  -72
  -86
  -102
  -118
  -135
  -152
  -170
  -187
  -204
  -221
  -238
  -254
  -269
  -285
  -300
  -315
  -329
  -344
  -359
  -374
  -389
  -404
  -420
  -437
  -454
  -472
  -490
  -510
  -530
  -552
Cash from operations, $m
  606
  740
  896
  1,072
  1,270
  1,489
  1,727
  1,981
  2,255
  2,548
  2,780
  3,110
  3,458
  3,823
  4,206
  4,606
  5,023
  5,457
  5,908
  6,378
  6,865
  7,372
  7,898
  8,444
  9,012
  9,603
  10,217
  10,856
  11,521
  12,214
Maintenance CAPEX, $m
  -270
  -355
  -456
  -576
  -716
  -875
  -1,055
  -1,255
  -1,476
  -1,716
  -1,977
  -2,257
  -2,556
  -2,874
  -3,210
  -3,564
  -3,935
  -4,323
  -4,729
  -5,152
  -5,593
  -6,051
  -6,528
  -7,024
  -7,538
  -8,074
  -8,630
  -9,208
  -9,809
  -10,434
New CAPEX, $m
  -820
  -986
  -1,165
  -1,352
  -1,545
  -1,743
  -1,942
  -2,140
  -2,336
  -2,529
  -2,718
  -2,902
  -3,082
  -3,258
  -3,430
  -3,600
  -3,768
  -3,936
  -4,104
  -4,274
  -4,447
  -4,624
  -4,806
  -4,994
  -5,190
  -5,394
  -5,608
  -5,832
  -6,067
  -6,314
Cash from investing activities, $m
  -1,090
  -1,341
  -1,621
  -1,928
  -2,261
  -2,618
  -2,997
  -3,395
  -3,812
  -4,245
  -4,695
  -5,159
  -5,638
  -6,132
  -6,640
  -7,164
  -7,703
  -8,259
  -8,833
  -9,426
  -10,040
  -10,675
  -11,334
  -12,018
  -12,728
  -13,468
  -14,238
  -15,040
  -15,876
  -16,748
Free cash flow, $m
  -484
  -601
  -725
  -856
  -991
  -1,129
  -1,269
  -1,414
  -1,557
  -1,697
  -1,915
  -2,049
  -2,180
  -2,308
  -2,434
  -2,558
  -2,680
  -2,803
  -2,925
  -3,049
  -3,175
  -3,304
  -3,436
  -3,574
  -3,716
  -3,865
  -4,020
  -4,184
  -4,355
  -4,535
Issuance/(repayment) of debt, $m
  1,363
  1,640
  1,936
  2,247
  2,569
  2,898
  3,228
  3,558
  3,884
  4,205
  4,518
  4,825
  5,124
  5,416
  5,703
  5,986
  6,266
  6,544
  6,824
  7,107
  7,394
  7,688
  7,991
  8,304
  8,629
  8,969
  9,324
  9,696
  10,087
  10,499
Issuance/(repurchase) of shares, $m
  323
  344
  368
  393
  419
  446
  474
  507
  539
  571
  384
  415
  444
  474
  502
  530
  558
  586
  613
  641
  670
  699
  729
  760
  793
  827
  862
  899
  938
  979
Cash from financing (excl. dividends), $m  
  1,686
  1,984
  2,304
  2,640
  2,988
  3,344
  3,702
  4,065
  4,423
  4,776
  4,902
  5,240
  5,568
  5,890
  6,205
  6,516
  6,824
  7,130
  7,437
  7,748
  8,064
  8,387
  8,720
  9,064
  9,422
  9,796
  10,186
  10,595
  11,025
  11,478
Total cash flow (excl. dividends), $m
  1,202
  1,383
  1,579
  1,784
  1,997
  2,214
  2,433
  2,651
  2,867
  3,078
  2,988
  3,190
  3,388
  3,581
  3,771
  3,958
  4,143
  4,327
  4,512
  4,699
  4,889
  5,084
  5,284
  5,491
  5,706
  5,930
  6,165
  6,411
  6,670
  6,942
Retained Cash Flow (-), $m
  -323
  -344
  -368
  -393
  -419
  -446
  -478
  -527
  -575
  -623
  -669
  -715
  -759
  -802
  -845
  -887
  -928
  -969
  -1,011
  -1,053
  -1,095
  -1,139
  -1,183
  -1,230
  -1,278
  -1,328
  -1,381
  -1,436
  -1,494
  -1,555
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
  878
  1,039
  1,211
  1,391
  1,578
  1,769
  1,955
  2,124
  2,291
  2,456
  2,318
  2,476
  2,629
  2,779
  2,926
  3,071
  3,215
  3,358
  3,502
  3,647
  3,794
  3,945
  4,100
  4,261
  4,428
  4,602
  4,784
  4,975
  5,176
  5,387
Discount rate, %
  12.60
  13.23
  13.89
  14.59
  15.32
  16.08
  16.89
  17.73
  18.62
  19.55
  20.52
  21.55
  22.63
  23.76
  24.95
  26.19
  27.50
  28.88
  30.32
  31.84
  33.43
  35.10
  36.86
  38.70
  40.64
  42.67
  44.80
  47.04
  49.39
  51.86
PV of cash for distribution, $m
  780
  811
  820
  807
  774
  723
  656
  576
  493
  412
  297
  238
  185
  141
  104
  74
  52
  35
  23
  14
  9
  5
  3
  2
  1
  0
  0
  0
  0
  0
Current shareholders' claim on cash, %
  58.2
  36.8
  24.9
  17.7
  13.1
  10.0
  7.9
  6.4
  5.2
  4.4
  3.9
  3.5
  3.2
  2.9
  2.7
  2.4
  2.2
  2.1
  1.9
  1.8
  1.7
  1.6
  1.5
  1.4
  1.3
  1.2
  1.2
  1.1
  1.0
  1.0

FINANCIAL RATIOS  of  Maxar Technologies Inc. (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 $2141 million for the last fiscal year's total revenue generated by Maxar Technologies Inc.. The default revenue input number comes from 0001 income statement of Maxar Technologies 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 MAXR stock valuation model: a) initial revenue growth rate of 31.3% 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 12.6%, whose default value for MAXR is calculated based on our internal credit rating of Maxar Technologies 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 Maxar Technologies 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 MAXR stock the variable cost ratio is equal to 100.3%.

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 6.7% for Maxar Technologies Inc..

Corporate tax rate of 27% is the nominal tax rate for Maxar Technologies 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 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 122.4%.

Life of production assets of 9.7 years is the average useful life of capital assets used in Maxar Technologies 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 MAXR is equal to -10.7%. 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 - $643 million for Maxar Technologies 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 59.405 million for Maxar Technologies 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 Maxar Technologies Inc. at the current share price and the inputted number of shares is $0.3 billion.

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