Intrinsic value of Shiloh Industries, Inc. - SHLO

Previous Close

$4.88

  Intrinsic Value

$4.67

stock screener

  Rating & Target

hold

-4%

Previous close

$4.88

 
Intrinsic value

$4.67

 
Up/down potential

-4%

 
Rating

hold

We calculate the intrinsic value of SHLO 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 0.1

 

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, %
  4.50
  4.55
  4.59
  4.64
  4.67
  4.70
  4.73
  4.76
  4.78
  4.81
  4.83
  4.84
  4.86
  4.87
  4.89
  4.90
  4.91
  4.92
  4.92
  4.93
  4.94
  4.95
  4.95
  4.96
  4.96
  4.96
  4.97
  4.97
  4.97
  4.98
Revenue, $m
  1,191
  1,246
  1,303
  1,363
  1,427
  1,494
  1,565
  1,639
  1,718
  1,800
  1,887
  1,978
  2,075
  2,176
  2,282
  2,394
  2,511
  2,635
  2,764
  2,901
  3,044
  3,194
  3,353
  3,519
  3,693
  3,877
  4,069
  4,272
  4,484
  4,707
Variable operating expenses, $m
  1,163
  1,215
  1,271
  1,330
  1,392
  1,457
  1,526
  1,598
  1,674
  1,755
  1,835
  1,924
  2,017
  2,115
  2,219
  2,327
  2,442
  2,562
  2,688
  2,820
  2,960
  3,106
  3,260
  3,421
  3,591
  3,769
  3,957
  4,153
  4,360
  4,577
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
  1,163
  1,215
  1,271
  1,330
  1,392
  1,457
  1,526
  1,598
  1,674
  1,755
  1,835
  1,924
  2,017
  2,115
  2,219
  2,327
  2,442
  2,562
  2,688
  2,820
  2,960
  3,106
  3,260
  3,421
  3,591
  3,769
  3,957
  4,153
  4,360
  4,577
Operating income, $m
  29
  30
  32
  34
  35
  37
  39
  41
  43
  46
  52
  55
  57
  60
  63
  66
  70
  73
  77
  80
  84
  88
  93
  97
  102
  107
  113
  118
  124
  130
EBITDA, $m
  78
  81
  85
  89
  93
  97
  102
  107
  112
  117
  123
  129
  135
  142
  149
  156
  164
  172
  180
  189
  199
  208
  219
  229
  241
  253
  265
  279
  292
  307
Interest expense (income), $m
  16
  13
  15
  16
  17
  19
  20
  22
  24
  25
  27
  29
  31
  34
  36
  38
  41
  44
  46
  49
  53
  56
  59
  63
  67
  71
  75
  79
  84
  89
  94
Earnings before tax, $m
  15
  16
  16
  16
  17
  17
  17
  18
  18
  18
  23
  23
  24
  24
  25
  25
  26
  26
  27
  28
  28
  29
  30
  31
  31
  32
  33
  34
  35
  36
Tax expense, $m
  4
  4
  4
  4
  4
  5
  5
  5
  5
  5
  6
  6
  6
  7
  7
  7
  7
  7
  7
  7
  8
  8
  8
  8
  8
  9
  9
  9
  9
  10
Net income, $m
  11
  11
  12
  12
  12
  12
  13
  13
  13
  13
  17
  17
  17
  18
  18
  18
  19
  19
  20
  20
  21
  21
  22
  22
  23
  24
  24
  25
  26
  26

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
  742
  776
  811
  849
  888
  930
  974
  1,021
  1,069
  1,121
  1,175
  1,232
  1,292
  1,355
  1,421
  1,490
  1,564
  1,640
  1,721
  1,806
  1,895
  1,989
  2,088
  2,191
  2,300
  2,414
  2,534
  2,660
  2,792
  2,931
Adjusted assets (=assets-cash), $m
  742
  776
  811
  849
  888
  930
  974
  1,021
  1,069
  1,121
  1,175
  1,232
  1,292
  1,355
  1,421
  1,490
  1,564
  1,640
  1,721
  1,806
  1,895
  1,989
  2,088
  2,191
  2,300
  2,414
  2,534
  2,660
  2,792
  2,931
Revenue / Adjusted assets
  1.605
  1.606
  1.607
  1.605
  1.607
  1.606
  1.607
  1.605
  1.607
  1.606
  1.606
  1.606
  1.606
  1.606
  1.606
  1.607
  1.605
  1.607
  1.606
  1.606
  1.606
  1.606
  1.606
  1.606
  1.606
  1.606
  1.606
  1.606
  1.606
  1.606
Average production assets, $m
  326
  341
  357
  373
  391
  409
  429
  449
  471
  493
  517
  542
  568
  596
  625
  656
  688
  722
  757
  795
  834
  875
  919
  964
  1,012
  1,062
  1,115
  1,170
  1,229
  1,290
Working capital, $m
  77
  81
  85
  89
  93
  97
  102
  107
  112
  117
  123
  129
  135
  141
  148
  156
  163
  171
  180
  189
  198
  208
  218
  229
  240
  252
  264
  278
  291
  306
Total debt, $m
  270
  294
  320
  347
  375
  405
  437
  470
  505
  542
  581
  622
  665
  711
  758
  808
  861
  916
  974
  1,035
  1,099
  1,167
  1,237
  1,312
  1,390
  1,472
  1,558
  1,649
  1,744
  1,844
Total liabilities, $m
  533
  558
  583
  610
  639
  669
  700
  734
  769
  806
  845
  886
  929
  974
  1,022
  1,072
  1,124
  1,179
  1,238
  1,299
  1,363
  1,430
  1,501
  1,575
  1,653
  1,736
  1,822
  1,912
  2,007
  2,107
Total equity, $m
  208
  218
  228
  239
  250
  261
  274
  287
  301
  315
  330
  346
  363
  381
  399
  419
  439
  461
  484
  508
  533
  559
  587
  616
  646
  678
  712
  747
  785
  824
Total liabilities and equity, $m
  741
  776
  811
  849
  889
  930
  974
  1,021
  1,070
  1,121
  1,175
  1,232
  1,292
  1,355
  1,421
  1,491
  1,563
  1,640
  1,722
  1,807
  1,896
  1,989
  2,088
  2,191
  2,299
  2,414
  2,534
  2,659
  2,792
  2,931
Debt-to-equity ratio
  1.290
  1.350
  1.400
  1.450
  1.500
  1.550
  1.600
  1.640
  1.680
  1.720
  1.760
  1.800
  1.830
  1.870
  1.900
  1.930
  1.960
  1.990
  2.010
  2.040
  2.060
  2.090
  2.110
  2.130
  2.150
  2.170
  2.190
  2.210
  2.220
  2.240
Adjusted equity ratio
  0.281
  0.281
  0.281
  0.281
  0.281
  0.281
  0.281
  0.281
  0.281
  0.281
  0.281
  0.281
  0.281
  0.281
  0.281
  0.281
  0.281
  0.281
  0.281
  0.281
  0.281
  0.281
  0.281
  0.281
  0.281
  0.281
  0.281
  0.281
  0.281
  0.281

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  11
  11
  12
  12
  12
  12
  13
  13
  13
  13
  17
  17
  17
  18
  18
  18
  19
  19
  20
  20
  21
  21
  22
  22
  23
  24
  24
  25
  26
  26
Depreciation, amort., depletion, $m
  49
  51
  53
  55
  58
  60
  63
  66
  69
  72
  71
  74
  78
  82
  86
  90
  94
  99
  104
  109
  114
  120
  126
  132
  139
  146
  153
  160
  168
  177
Funds from operations, $m
  60
  62
  65
  67
  70
  73
  76
  79
  82
  85
  88
  91
  95
  99
  104
  108
  113
  118
  124
  129
  135
  141
  148
  154
  162
  169
  177
  185
  194
  203
Change in working capital, $m
  3
  4
  4
  4
  4
  4
  5
  5
  5
  5
  6
  6
  6
  7
  7
  7
  8
  8
  8
  9
  9
  10
  10
  11
  11
  12
  13
  13
  14
  15
Cash from operations, $m
  57
  59
  61
  63
  66
  68
  71
  74
  77
  80
  82
  85
  89
  93
  97
  101
  106
  110
  115
  120
  126
  131
  137
  144
  150
  157
  164
  172
  180
  189
Maintenance CAPEX, $m
  -43
  -45
  -47
  -49
  -51
  -54
  -56
  -59
  -62
  -64
  -68
  -71
  -74
  -78
  -82
  -86
  -90
  -94
  -99
  -104
  -109
  -114
  -120
  -126
  -132
  -139
  -146
  -153
  -160
  -168
New CAPEX, $m
  -14
  -15
  -16
  -17
  -17
  -18
  -19
  -20
  -21
  -23
  -24
  -25
  -26
  -28
  -29
  -31
  -32
  -34
  -36
  -37
  -39
  -41
  -43
  -46
  -48
  -50
  -53
  -55
  -58
  -61
Cash from investing activities, $m
  -57
  -60
  -63
  -66
  -68
  -72
  -75
  -79
  -83
  -87
  -92
  -96
  -100
  -106
  -111
  -117
  -122
  -128
  -135
  -141
  -148
  -155
  -163
  -172
  -180
  -189
  -199
  -208
  -218
  -229
Free cash flow, $m
  0
  -1
  -1
  -2
  -3
  -4
  -5
  -5
  -6
  -7
  -9
  -10
  -12
  -13
  -14
  -15
  -17
  -18
  -19
  -21
  -22
  -24
  -26
  -28
  -30
  -32
  -34
  -36
  -38
  -41
Issuance/(repayment) of debt, $m
  23
  24
  26
  27
  29
  30
  32
  33
  35
  37
  39
  41
  43
  45
  48
  50
  53
  55
  58
  61
  64
  67
  71
  74
  78
  82
  86
  91
  95
  100
Issuance/(repurchase) of shares, $m
  0
  0
  0
  0
  0
  0
  0
  0
  1
  1
  0
  0
  0
  0
  0
  1
  2
  2
  3
  4
  4
  5
  6
  7
  8
  9
  9
  10
  12
  13
Cash from financing (excl. dividends), $m  
  23
  24
  26
  27
  29
  30
  32
  33
  36
  38
  39
  41
  43
  45
  48
  51
  55
  57
  61
  65
  68
  72
  77
  81
  86
  91
  95
  101
  107
  113
Total cash flow (excl. dividends), $m
  24
  24
  24
  25
  26
  26
  27
  28
  29
  31
  29
  30
  31
  33
  34
  36
  38
  40
  42
  44
  46
  48
  51
  53
  56
  59
  62
  65
  68
  72
Retained Cash Flow (-), $m
  -9
  -9
  -10
  -11
  -11
  -12
  -12
  -13
  -14
  -14
  -15
  -16
  -17
  -18
  -19
  -20
  -21
  -22
  -23
  -24
  -25
  -26
  -28
  -29
  -31
  -32
  -34
  -35
  -37
  -39
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
  15
  14
  14
  14
  14
  15
  15
  15
  16
  16
  14
  14
  15
  15
  16
  16
  17
  18
  19
  20
  21
  22
  23
  24
  26
  27
  28
  30
  31
  33
Discount rate, %
  7.60
  7.98
  8.38
  8.80
  9.24
  9.70
  10.18
  10.69
  11.23
  11.79
  12.38
  13.00
  13.65
  14.33
  15.05
  15.80
  16.59
  17.42
  18.29
  19.20
  20.17
  21.17
  22.23
  23.34
  24.51
  25.74
  27.02
  28.37
  29.79
  31.28
PV of cash for distribution, $m
  14
  12
  11
  10
  9
  8
  7
  7
  6
  5
  4
  3
  3
  2
  2
  2
  1
  1
  1
  1
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Current shareholders' claim on cash, %
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  99.9
  99.6
  99.1
  99.1
  99.1
  99.1
  99.1
  98.9
  98.5
  98.0
  97.3
  96.4
  95.4
  94.2
  92.9
  91.5
  90.1
  88.5
  86.9
  85.2
  83.4
  81.6
  79.8

Shiloh Industries, Inc. is a supplier of lightweighting, noise and vibration solutions to the automotive, commercial vehicle and industrial markets. The Company operates through Automotive and Commercial Vehicles segment. The Company offers portfolio of lightweighting solutions in aluminum, magnesium, steel and high strength steel alloys. The Company delivers these solutions through design, engineering and manufacturing of first operation blanks, engineered welded blanks, complex stampings, modular assemblies, and engineered aluminum and magnesium die casting and machined components. The Company offers its solutions through its BlankLight, CastLight and StampLight brands. The Company delivers solutions in body, chassis and powertrain systems to original equipment manufacturers (OEMs). The Company also provides intermediate steel processing services, such as oiling, leveling, cutting-to-length, slitting, edge trimming of hot and cold-rolled steel coils and inventory control services.

FINANCIAL RATIOS  of  Shiloh Industries, Inc. (SHLO)

Valuation Ratios
P/E Ratio 21.5
Price to Sales 0.1
Price to Book 0.6
Price to Tangible Book
Price to Cash Flow 1.2
Price to Free Cash Flow 2.1
Growth Rates
Sales Growth Rate -0.7%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate -28.2%
Cap. Spend. - 3 Yr. Gr. Rate 0.7%
Financial Strength
Quick Ratio 5
Current Ratio 0
LT Debt to Equity 193.2%
Total Debt to Equity 194.7%
Interest Coverage 1
Management Effectiveness
Return On Assets -9.3%
Ret/ On Assets - 3 Yr. Avg. -1%
Return On Total Capital 1%
Ret/ On T. Cap. - 3 Yr. Avg. 2.8%
Return On Equity 3%
Return On Equity - 3 Yr. Avg. 7.3%
Asset Turnover 1.7
Profitability Ratios
Gross Margin 9%
Gross Margin - 3 Yr. Avg. 8.7%
EBITDA Margin 5%
EBITDA Margin - 3 Yr. Avg. 5.6%
Operating Margin 1.8%
Oper. Margin - 3 Yr. Avg. 2.4%
Pre-Tax Margin -0.1%
Pre-Tax Margin - 3 Yr. Avg. 1.3%
Net Profit Margin 0.4%
Net Profit Margin - 3 Yr. Avg. 1.1%
Effective Tax Rate 500%
Eff/ Tax Rate - 3 Yr. Avg. 187.4%
Payout Ratio 0%

SHLO stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the SHLO stock intrinsic value calculation we used $1140 million for the last fiscal year's total revenue generated by Shiloh Industries, Inc.. The default revenue input number comes from 0001 income statement of Shiloh Industries, 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 SHLO stock valuation model: a) initial revenue growth rate of 4.5% 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 7.6%, whose default value for SHLO is calculated based on our internal credit rating of Shiloh Industries, 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 Shiloh Industries, 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 SHLO stock the variable cost ratio is equal to 97.6%.

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 SHLO 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 Shiloh Industries, Inc..

Corporate tax rate of 27% is the nominal tax rate for Shiloh Industries, 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 SHLO 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 SHLO are equal to 27.4%.

Life of production assets of 7.3 years is the average useful life of capital assets used in Shiloh Industries, 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 SHLO is equal to 6.5%. 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 - $199.522 million for Shiloh Industries, 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 23.708 million for Shiloh Industries, 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 Shiloh Industries, Inc. at the current share price and the inputted number of shares is $0.1 billion.

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