Intrinsic value of Materialise ADR - MTLS

Previous Close

$11.99

  Intrinsic Value

$8.39

stock screener

  Rating & Target

sell

-30%

Previous close

$11.99

 
Intrinsic value

$8.39

 
Up/down potential

-30%

 
Rating

sell

*Intrinsic value change (in %) minus stock price change (in %) in the past 12 months.

We calculate the intrinsic value of MTLS 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.

Please visit our new site that uses elements of artificial intelligence for stock valuation: artificial intelligence value of Materialise ADR (MTLS) stock.

STOCK VALUATION INPUT DATA

Initial revenue growth rate, %
Terminal revenue growth rate, %
Revenue decline factor
Initial discount rate, %
Discount rate multiplier
Shares outstanding, mln

 

FINANCIAL STATEMENTS FORECAST and PRESENT VALUE CALCULATION

Fiscal year
2016(a)
   2017
   2018
   2019
   2020
   2021
   2022
   2023
   2024
   2025
   2026
   2027
   2028
   2029
   2030
   2031
   2032
   2033
   2034
   2035
   2036
   2037
   2038
   2039
   2040
   2041
   2042
   2043
   2044
   2045
   2046

INCOME STATEMENT

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue growth rate, %
  12.04
  13.30
  12.47
  11.72
  11.05
  10.45
  9.90
  9.41
  8.97
  8.57
  8.22
  7.89
  7.60
  7.34
  7.11
  6.90
  6.71
  6.54
  6.38
  6.25
  6.12
  6.01
  5.91
  5.82
  5.74
  5.66
  5.60
  5.54
  5.48
  5.43
  5.39
Revenue, $m
  121
  137
  154
  172
  191
  211
  232
  254
  277
  301
  325
  351
  378
  405
  434
  464
  495
  528
  561
  596
  633
  671
  711
  752
  795
  840
  887
  936
  988
  1,041
  1,097
Variable operating expenses, $m
 
  95
  107
  119
  132
  146
  160
  175
  191
  207
  224
  241
  259
  278
  298
  319
  340
  362
  385
  409
  435
  461
  488
  516
  546
  577
  609
  643
  678
  715
  753
Fixed operating expenses, $m
 
  39
  40
  41
  42
  43
  44
  45
  46
  47
  49
  50
  51
  52
  54
  55
  56
  58
  59
  61
  62
  64
  65
  67
  69
  70
  72
  74
  76
  78
  80
Total operating expenses, $m
  121
  134
  147
  160
  174
  189
  204
  220
  237
  254
  273
  291
  310
  330
  352
  374
  396
  420
  444
  470
  497
  525
  553
  583
  615
  647
  681
  717
  754
  793
  833
Operating income, $m
  0
  3
  8
  12
  17
  22
  28
  34
  40
  46
  52
  60
  67
  75
  82
  90
  99
  108
  117
  126
  136
  146
  157
  169
  180
  193
  206
  219
  234
  249
  264
EBITDA, $m
  9
  13
  18
  24
  30
  37
  43
  50
  58
  66
  74
  82
  91
  100
  110
  120
  130
  141
  152
  164
  176
  189
  202
  216
  230
  246
  262
  278
  296
  314
  333
Interest expense (income), $m
  1
  1
  1
  2
  2
  3
  3
  4
  4
  5
  5
  6
  7
  7
  8
  8
  9
  10
  11
  11
  12
  13
  14
  15
  16
  17
  18
  19
  20
  22
  23
Earnings before tax, $m
  -1
  2
  6
  10
  15
  20
  25
  30
  35
  41
  47
  54
  61
  68
  75
  82
  90
  98
  106
  115
  124
  133
  143
  154
  164
  176
  188
  200
  213
  227
  241
Tax expense, $m
  2
  1
  2
  3
  4
  5
  7
  8
  10
  11
  13
  15
  16
  18
  20
  22
  24
  26
  29
  31
  33
  36
  39
  41
  44
  47
  51
  54
  58
  61
  65
Net income, $m
  -3
  2
  4
  8
  11
  14
  18
  22
  26
  30
  34
  40
  44
  49
  54
  60
  65
  71
  77
  84
  90
  97
  105
  112
  120
  128
  137
  146
  156
  166
  176

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  59
  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
  171
  127
  143
  160
  177
  196
  215
  235
  256
  278
  301
  325
  350
  375
  402
  430
  459
  489
  520
  552
  586
  621
  658
  696
  736
  778
  821
  867
  914
  964
  1,016
Adjusted assets (=assets-cash), $m
  112
  127
  143
  160
  177
  196
  215
  235
  256
  278
  301
  325
  350
  375
  402
  430
  459
  489
  520
  552
  586
  621
  658
  696
  736
  778
  821
  867
  914
  964
  1,016
Revenue / Adjusted assets
  1.080
  1.079
  1.077
  1.075
  1.079
  1.077
  1.079
  1.081
  1.082
  1.083
  1.080
  1.080
  1.080
  1.080
  1.080
  1.079
  1.078
  1.080
  1.079
  1.080
  1.080
  1.081
  1.081
  1.080
  1.080
  1.080
  1.080
  1.080
  1.081
  1.080
  1.080
Average production assets, $m
  54
  61
  69
  77
  85
  94
  104
  113
  123
  134
  145
  157
  168
  181
  194
  207
  221
  235
  250
  266
  282
  299
  317
  335
  355
  375
  396
  418
  440
  464
  489
Working capital, $m
  51
  -2
  -3
  -3
  -3
  -4
  -4
  -4
  -5
  -5
  -6
  -6
  -6
  -7
  -7
  -8
  -8
  -9
  -10
  -10
  -11
  -11
  -12
  -13
  -14
  -14
  -15
  -16
  -17
  -18
  -19
Total debt, $m
  36
  41
  53
  65
  78
  91
  105
  120
  136
  152
  168
  186
  204
  223
  242
  263
  284
  306
  328
  352
  377
  403
  430
  458
  487
  517
  549
  583
  617
  654
  692
Total liabilities, $m
  87
  93
  105
  117
  130
  143
  157
  172
  188
  204
  220
  238
  256
  275
  294
  315
  336
  358
  380
  404
  429
  455
  482
  510
  539
  569
  601
  635
  669
  706
  744
Total equity, $m
  83
  34
  38
  43
  47
  52
  58
  63
  69
  75
  81
  87
  94
  101
  108
  115
  123
  131
  139
  148
  157
  166
  176
  187
  197
  208
  220
  232
  245
  258
  272
Total liabilities and equity, $m
  170
  127
  143
  160
  177
  195
  215
  235
  257
  279
  301
  325
  350
  376
  402
  430
  459
  489
  519
  552
  586
  621
  658
  697
  736
  777
  821
  867
  914
  964
  1,016
Debt-to-equity ratio
  0.434
  1.200
  1.370
  1.510
  1.640
  1.740
  1.830
  1.910
  1.970
  2.030
  2.090
  2.130
  2.180
  2.210
  2.250
  2.280
  2.310
  2.330
  2.360
  2.380
  2.400
  2.420
  2.440
  2.450
  2.470
  2.480
  2.500
  2.510
  2.520
  2.530
  2.540
Adjusted equity ratio
  0.214
  0.268
  0.268
  0.268
  0.268
  0.268
  0.268
  0.268
  0.268
  0.268
  0.268
  0.268
  0.268
  0.268
  0.268
  0.268
  0.268
  0.268
  0.268
  0.268
  0.268
  0.268
  0.268
  0.268
  0.268
  0.268
  0.268
  0.268
  0.268
  0.268
  0.268

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  -3
  2
  4
  8
  11
  14
  18
  22
  26
  30
  34
  40
  44
  49
  54
  60
  65
  71
  77
  84
  90
  97
  105
  112
  120
  128
  137
  146
  156
  166
  176
Depreciation, amort., depletion, $m
  9
  10
  11
  12
  13
  14
  15
  17
  18
  20
  21
  22
  24
  25
  27
  29
  31
  33
  35
  37
  40
  42
  45
  47
  50
  53
  56
  59
  62
  65
  69
Funds from operations, $m
  10
  11
  15
  19
  24
  28
  33
  39
  44
  50
  56
  62
  68
  75
  82
  89
  97
  104
  113
  121
  130
  139
  149
  159
  170
  181
  193
  205
  218
  231
  245
Change in working capital, $m
  1
  0
  0
  0
  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
Cash from operations, $m
  9
  11
  15
  20
  24
  29
  34
  39
  44
  50
  56
  62
  69
  75
  82
  89
  97
  105
  113
  122
  131
  140
  150
  160
  171
  182
  194
  206
  219
  232
  246
Maintenance CAPEX, $m
  0
  -8
  -9
  -10
  -11
  -12
  -13
  -15
  -16
  -17
  -19
  -20
  -22
  -24
  -25
  -27
  -29
  -31
  -33
  -35
  -37
  -40
  -42
  -45
  -47
  -50
  -53
  -56
  -59
  -62
  -65
New CAPEX, $m
  -15
  -7
  -8
  -8
  -8
  -9
  -9
  -10
  -10
  -11
  -11
  -11
  -12
  -12
  -13
  -13
  -14
  -14
  -15
  -16
  -16
  -17
  -18
  -18
  -19
  -20
  -21
  -22
  -23
  -24
  -25
Cash from investing activities, $m
  -13
  -15
  -17
  -18
  -19
  -21
  -22
  -25
  -26
  -28
  -30
  -31
  -34
  -36
  -38
  -40
  -43
  -45
  -48
  -51
  -53
  -57
  -60
  -63
  -66
  -70
  -74
  -78
  -82
  -86
  -90
Free cash flow, $m
  -4
  -3
  -1
  2
  5
  8
  11
  15
  18
  22
  26
  30
  35
  39
  44
  49
  54
  59
  65
  71
  77
  83
  90
  97
  104
  112
  120
  128
  137
  146
  156
Issuance/(repayment) of debt, $m
  11
  11
  12
  12
  13
  14
  14
  15
  15
  16
  17
  17
  18
  19
  20
  20
  21
  22
  23
  24
  25
  26
  27
  28
  29
  31
  32
  33
  35
  36
  38
Issuance/(repurchase) of shares, $m
  0
  3
  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  
  10
  14
  12
  12
  13
  14
  14
  15
  15
  16
  17
  17
  18
  19
  20
  20
  21
  22
  23
  24
  25
  26
  27
  28
  29
  31
  32
  33
  35
  36
  38
Total cash flow (excl. dividends), $m
  5
  10
  11
  14
  18
  21
  25
  30
  34
  38
  43
  48
  53
  58
  63
  69
  75
  81
  88
  95
  102
  109
  117
  125
  133
  142
  152
  161
  172
  182
  194
Retained Cash Flow (-), $m
  5
  -4
  -4
  -4
  -5
  -5
  -5
  -5
  -6
  -6
  -6
  -6
  -7
  -7
  -7
  -7
  -8
  -8
  -8
  -9
  -9
  -9
  -10
  -10
  -11
  -11
  -12
  -12
  -13
  -13
  -14
Prev. year cash balance distribution, $m
 
  53
  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
 
  59
  6
  10
  13
  16
  20
  24
  28
  32
  37
  41
  46
  51
  56
  62
  67
  73
  80
  86
  93
  100
  107
  115
  123
  131
  140
  149
  159
  169
  180
Discount rate, %
 
  4.30
  4.52
  4.74
  4.98
  5.23
  5.49
  5.76
  6.05
  6.35
  6.67
  7.00
  7.35
  7.72
  8.11
  8.51
  8.94
  9.39
  9.86
  10.35
  10.87
  11.41
  11.98
  12.58
  13.21
  13.87
  14.56
  15.29
  16.05
  16.86
  17.70
PV of cash for distribution, $m
 
  57
  6
  8
  11
  13
  15
  16
  18
  19
  19
  20
  20
  19
  19
  18
  17
  16
  15
  13
  12
  10
  9
  8
  6
  5
  4
  3
  2
  2
  1
Current shareholders' claim on cash, %
  100
  98.8
  98.8
  98.8
  98.8
  98.8
  98.8
  98.8
  98.8
  98.8
  98.8
  98.8
  98.8
  98.8
  98.8
  98.8
  98.8
  98.8
  98.8
  98.8
  98.8
  98.8
  98.8
  98.8
  98.8
  98.8
  98.8
  98.8
  98.8
  98.8
  98.8

Materialise NV is a Belgium-based company engaged in the software industry. The Company is a provider of additive manufacturing software and of three dimensional (3D) printing services. Materialise NV incorporates of 3D printing experience into a range of software solution and 3D printing services, through which the Company seeks to form the backbone of the 3D printing industry. Its solutions enable players in a wide variety of industries, including healthcare, automotive, aerospace, art and design, and consumer goods, to build 3D printing applications. The Company operates in the domestic market and worldwide, including Colombia, Brazil, Australia, Malaysia, China, Japan, Austria, Poland, Germany and France, among others.

FINANCIAL RATIOS  of  Materialise ADR (MTLS)

Valuation Ratios
P/E Ratio -189.2
Price to Sales 4.7
Price to Book 6.8
Price to Tangible Book
Price to Cash Flow 63.1
Price to Free Cash Flow -94.6
Growth Rates
Sales Growth Rate 12%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate 36.4%
Cap. Spend. - 3 Yr. Gr. Rate 38%
Financial Strength
Quick Ratio 10
Current Ratio 0.1
LT Debt to Equity 36.1%
Total Debt to Equity 43.4%
Interest Coverage 0
Management Effectiveness
Return On Assets 0%
Ret/ On Assets - 3 Yr. Avg. 0.5%
Return On Total Capital -2.6%
Ret/ On T. Cap. - 3 Yr. Avg. -0.9%
Return On Equity -3.5%
Return On Equity - 3 Yr. Avg. -1.1%
Asset Turnover 0.7
Profitability Ratios
Gross Margin 59.5%
Gross Margin - 3 Yr. Avg. 59.1%
EBITDA Margin 7.4%
EBITDA Margin - 3 Yr. Avg. 7.1%
Operating Margin 0%
Oper. Margin - 3 Yr. Avg. -1.2%
Pre-Tax Margin -0.8%
Pre-Tax Margin - 3 Yr. Avg. -0.4%
Net Profit Margin -2.5%
Net Profit Margin - 3 Yr. Avg. -1%
Effective Tax Rate -200%
Eff/ Tax Rate - 3 Yr. Avg. -66.7%
Payout Ratio 0%

MTLS stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the MTLS stock intrinsic value calculation we used $121 million for the last fiscal year's total revenue generated by Materialise ADR. The default revenue input number comes from 2016 income statement of Materialise ADR. 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 MTLS stock valuation model: a) initial revenue growth rate of 13.3% 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 4.3%, whose default value for MTLS is calculated based on our internal credit rating of Materialise ADR, 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 Materialise ADR.
    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 MTLS stock the variable cost ratio is equal to 69.4%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $38 million in the base year in the intrinsic value calculation for MTLS 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 3.5% for Materialise ADR.

Corporate tax rate of 27% is the nominal tax rate for Materialise ADR. 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 MTLS 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 MTLS are equal to 44.6%.

Life of production assets of 7.1 years is the average useful life of capital assets used in Materialise ADR 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 MTLS is equal to -1.7%. 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 - $83 million for Materialise ADR - 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 47.469 million for Materialise ADR 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 Materialise ADR at the current share price and the inputted number of shares is $0.6 billion.

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COMPANY NEWS

▶ How Financially Strong Is Materialise NV (NASDAQ:MTLS)?   [Dec-26-17 12:15PM  Simply Wall St.]
▶ Is There Now An Opportunity In Materialise NV (MTLS)?   [Nov-09-17 07:25AM  Simply Wall St.]
▶ Materialise reports 3Q loss   [06:41AM  Associated Press]
▶ Should You Buy Materialise NV (MTLS)?   [Sep-11-17 12:15PM  Simply Wall St.]
▶ Materialise reports 2Q loss   [Aug-08-17 10:00PM  Associated Press]
▶ Investor Network: Materialise NV to Host Earnings Call   [May-09-17 07:15AM  Accesswire]
▶ Materialise reports 1Q loss   [06:40AM  Associated Press]
▶ Materialise NV to Report First Quarter 2017 Earnings   [Apr-26-17 09:00AM  GlobeNewswire]
▶ Materialise posts 4Q profit   [06:46AM  Associated Press]
▶ Materialise posts 3Q loss   [06:41AM  AP]
▶ Materialise reports 2Q loss   [06:37AM  AP]
▶ MATERIALISE NV Financials   [May-05-16 01:04PM  EDGAR Online Financials]
▶ Materialise posts 4Q profit   [07:01AM  AP]
▶ Three of the Biggest 3D Printing Companies   [Feb-04-16 02:01PM  at Investopedia]
Financial statements of MTLS
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