Intrinsic value of Shiloh Industries - SHLO

Previous Close

$8.21

  Intrinsic Value

$3.69

stock screener

  Rating & Target

str. sell

-55%

Previous close

$8.21

 
Intrinsic value

$3.69

 
Up/down potential

-55%

 
Rating

str. sell

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 0.2

 

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, %
  8.90
  8.51
  8.16
  7.84
  7.56
  7.30
  7.07
  6.87
  6.68
  6.51
  6.36
  6.22
  6.10
  5.99
  5.89
  5.80
  5.72
  5.65
  5.59
  5.53
  5.47
  5.43
  5.38
  5.35
  5.31
  5.28
  5.25
  5.23
  5.20
  5.18
Revenue, $m
  1,135
  1,231
  1,332
  1,436
  1,545
  1,658
  1,775
  1,897
  2,023
  2,155
  2,292
  2,435
  2,583
  2,738
  2,899
  3,068
  3,243
  3,427
  3,618
  3,818
  4,027
  4,245
  4,474
  4,713
  4,963
  5,225
  5,500
  5,787
  6,089
  6,404
Variable operating expenses, $m
  1,117
  1,212
  1,311
  1,413
  1,520
  1,630
  1,745
  1,865
  1,989
  2,118
  2,248
  2,388
  2,534
  2,686
  2,844
  3,009
  3,181
  3,361
  3,549
  3,745
  3,950
  4,164
  4,388
  4,623
  4,869
  5,126
  5,395
  5,677
  5,972
  6,282
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
  1,117
  1,212
  1,311
  1,413
  1,520
  1,630
  1,745
  1,865
  1,989
  2,118
  2,248
  2,388
  2,534
  2,686
  2,844
  3,009
  3,181
  3,361
  3,549
  3,745
  3,950
  4,164
  4,388
  4,623
  4,869
  5,126
  5,395
  5,677
  5,972
  6,282
Operating income, $m
  17
  19
  21
  23
  25
  27
  30
  32
  34
  37
  44
  47
  49
  52
  55
  59
  62
  65
  69
  73
  77
  81
  86
  90
  95
  100
  105
  111
  116
  122
EBITDA, $m
  64
  70
  75
  81
  87
  94
  100
  107
  114
  122
  130
  138
  146
  155
  164
  173
  183
  194
  205
  216
  228
  240
  253
  267
  281
  295
  311
  327
  344
  362
Interest expense (income), $m
  16
  12
  15
  18
  21
  24
  27
  30
  33
  36
  40
  44
  48
  52
  56
  60
  65
  69
  74
  79
  85
  90
  96
  103
  109
  116
  123
  130
  138
  146
  154
Earnings before tax, $m
  5
  4
  3
  3
  2
  1
  0
  -1
  -2
  -3
  0
  -1
  -2
  -3
  -5
  -6
  -7
  -9
  -10
  -12
  -14
  -15
  -17
  -19
  -21
  -23
  -25
  -27
  -29
  -32
Tax expense, $m
  1
  1
  1
  1
  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
Net income, $m
  4
  3
  2
  2
  1
  1
  0
  -1
  -2
  -3
  0
  -1
  -2
  -3
  -5
  -6
  -7
  -9
  -10
  -12
  -14
  -15
  -17
  -19
  -21
  -23
  -25
  -27
  -29
  -32

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
  674
  731
  791
  853
  917
  984
  1,054
  1,126
  1,201
  1,280
  1,361
  1,446
  1,534
  1,626
  1,722
  1,822
  1,926
  2,035
  2,148
  2,267
  2,391
  2,521
  2,657
  2,799
  2,947
  3,103
  3,266
  3,437
  3,616
  3,803
Adjusted assets (=assets-cash), $m
  674
  731
  791
  853
  917
  984
  1,054
  1,126
  1,201
  1,280
  1,361
  1,446
  1,534
  1,626
  1,722
  1,822
  1,926
  2,035
  2,148
  2,267
  2,391
  2,521
  2,657
  2,799
  2,947
  3,103
  3,266
  3,437
  3,616
  3,803
Revenue / Adjusted assets
  1.684
  1.684
  1.684
  1.683
  1.685
  1.685
  1.684
  1.685
  1.684
  1.684
  1.684
  1.684
  1.684
  1.684
  1.684
  1.684
  1.684
  1.684
  1.684
  1.684
  1.684
  1.684
  1.684
  1.684
  1.684
  1.684
  1.684
  1.684
  1.684
  1.684
Average production assets, $m
  314
  341
  369
  398
  428
  459
  492
  525
  560
  597
  635
  674
  716
  758
  803
  850
  898
  949
  1,002
  1,058
  1,115
  1,176
  1,239
  1,306
  1,375
  1,447
  1,523
  1,603
  1,687
  1,774
Working capital, $m
  78
  85
  92
  99
  107
  114
  122
  131
  140
  149
  158
  168
  178
  189
  200
  212
  224
  236
  250
  263
  278
  293
  309
  325
  342
  361
  379
  399
  420
  442
Total debt, $m
  222
  262
  303
  346
  391
  438
  486
  537
  589
  644
  700
  759
  821
  884
  951
  1,021
  1,093
  1,169
  1,248
  1,331
  1,417
  1,507
  1,602
  1,701
  1,804
  1,913
  2,026
  2,145
  2,269
  2,400
Total liabilities, $m
  469
  509
  550
  594
  638
  685
  734
  784
  836
  891
  947
  1,006
  1,068
  1,132
  1,198
  1,268
  1,340
  1,416
  1,495
  1,578
  1,664
  1,755
  1,849
  1,948
  2,051
  2,160
  2,273
  2,392
  2,516
  2,647
Total equity, $m
  205
  222
  240
  259
  279
  299
  320
  342
  365
  389
  414
  440
  466
  494
  523
  554
  585
  619
  653
  689
  727
  766
  808
  851
  896
  943
  993
  1,045
  1,099
  1,156
Total liabilities and equity, $m
  674
  731
  790
  853
  917
  984
  1,054
  1,126
  1,201
  1,280
  1,361
  1,446
  1,534
  1,626
  1,721
  1,822
  1,925
  2,035
  2,148
  2,267
  2,391
  2,521
  2,657
  2,799
  2,947
  3,103
  3,266
  3,437
  3,615
  3,803
Debt-to-equity ratio
  1.080
  1.180
  1.260
  1.340
  1.400
  1.460
  1.520
  1.570
  1.610
  1.650
  1.690
  1.730
  1.760
  1.790
  1.820
  1.840
  1.870
  1.890
  1.910
  1.930
  1.950
  1.970
  1.980
  2.000
  2.010
  2.030
  2.040
  2.050
  2.060
  2.080
Adjusted equity ratio
  0.304
  0.304
  0.304
  0.304
  0.304
  0.304
  0.304
  0.304
  0.304
  0.304
  0.304
  0.304
  0.304
  0.304
  0.304
  0.304
  0.304
  0.304
  0.304
  0.304
  0.304
  0.304
  0.304
  0.304
  0.304
  0.304
  0.304
  0.304
  0.304
  0.304

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  4
  3
  2
  2
  1
  1
  0
  -1
  -2
  -3
  0
  -1
  -2
  -3
  -5
  -6
  -7
  -9
  -10
  -12
  -14
  -15
  -17
  -19
  -21
  -23
  -25
  -27
  -29
  -32
Depreciation, amort., depletion, $m
  47
  50
  54
  58
  62
  66
  71
  75
  80
  85
  86
  91
  97
  102
  109
  115
  121
  128
  135
  143
  151
  159
  167
  176
  186
  196
  206
  217
  228
  240
Funds from operations, $m
  50
  53
  57
  60
  63
  67
  71
  74
  78
  82
  86
  90
  94
  99
  104
  109
  114
  119
  125
  131
  137
  144
  150
  158
  165
  173
  181
  190
  198
  208
Change in working capital, $m
  6
  7
  7
  7
  7
  8
  8
  8
  9
  9
  9
  10
  10
  11
  11
  12
  12
  13
  13
  14
  14
  15
  16
  17
  17
  18
  19
  20
  21
  22
Cash from operations, $m
  44
  47
  50
  53
  56
  59
  62
  66
  69
  73
  76
  80
  84
  88
  93
  97
  102
  107
  112
  117
  123
  129
  135
  141
  148
  155
  162
  170
  178
  186
Maintenance CAPEX, $m
  -39
  -42
  -46
  -50
  -54
  -58
  -62
  -66
  -71
  -76
  -81
  -86
  -91
  -97
  -102
  -109
  -115
  -121
  -128
  -135
  -143
  -151
  -159
  -167
  -176
  -186
  -196
  -206
  -217
  -228
New CAPEX, $m
  -26
  -27
  -28
  -29
  -30
  -31
  -32
  -34
  -35
  -36
  -38
  -40
  -41
  -43
  -45
  -47
  -49
  -51
  -53
  -55
  -58
  -61
  -63
  -66
  -69
  -73
  -76
  -80
  -83
  -87
Cash from investing activities, $m
  -65
  -69
  -74
  -79
  -84
  -89
  -94
  -100
  -106
  -112
  -119
  -126
  -132
  -140
  -147
  -156
  -164
  -172
  -181
  -190
  -201
  -212
  -222
  -233
  -245
  -259
  -272
  -286
  -300
  -315
Free cash flow, $m
  -21
  -22
  -24
  -26
  -28
  -30
  -32
  -34
  -37
  -40
  -42
  -45
  -48
  -51
  -55
  -58
  -62
  -65
  -69
  -74
  -78
  -83
  -88
  -93
  -98
  -104
  -110
  -116
  -122
  -129
Issuance/(repayment) of debt, $m
  39
  40
  42
  43
  45
  47
  48
  50
  52
  54
  57
  59
  61
  64
  67
  70
  73
  76
  79
  83
  86
  90
  94
  99
  103
  108
  113
  119
  124
  130
Issuance/(repurchase) of shares, $m
  13
  14
  16
  17
  18
  20
  21
  23
  25
  27
  25
  27
  29
  31
  34
  36
  39
  42
  45
  48
  51
  55
  58
  62
  66
  70
  74
  79
  84
  89
Cash from financing (excl. dividends), $m  
  52
  54
  58
  60
  63
  67
  69
  73
  77
  81
  82
  86
  90
  95
  101
  106
  112
  118
  124
  131
  137
  145
  152
  161
  169
  178
  187
  198
  208
  219
Total cash flow (excl. dividends), $m
  31
  32
  33
  34
  35
  36
  38
  39
  40
  42
  39
  41
  42
  44
  46
  48
  50
  52
  55
  57
  60
  62
  65
  68
  71
  75
  78
  82
  86
  90
Retained Cash Flow (-), $m
  -17
  -17
  -18
  -19
  -20
  -20
  -21
  -23
  -25
  -27
  -25
  -27
  -29
  -31
  -34
  -36
  -39
  -42
  -45
  -48
  -51
  -55
  -58
  -62
  -66
  -70
  -74
  -79
  -84
  -89
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
  14
  14
  15
  15
  16
  16
  16
  16
  15
  15
  14
  14
  13
  13
  12
  12
  11
  10
  10
  9
  8
  8
  7
  6
  5
  5
  4
  3
  2
  1
Discount rate, %
  5.80
  6.09
  6.39
  6.71
  7.05
  7.40
  7.77
  8.16
  8.57
  9.00
  9.45
  9.92
  10.42
  10.94
  11.48
  12.06
  12.66
  13.29
  13.96
  14.66
  15.39
  16.16
  16.97
  17.81
  18.71
  19.64
  20.62
  21.65
  22.74
  23.87
PV of cash for distribution, $m
  13
  13
  12
  12
  11
  10
  10
  9
  7
  6
  5
  4
  4
  3
  2
  2
  1
  1
  1
  1
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Current shareholders' claim on cash, %
  93.7
  87.7
  82.0
  76.7
  71.7
  67.1
  62.7
  58.5
  54.6
  51.0
  48.0
  45.1
  42.4
  39.7
  37.2
  34.9
  32.6
  30.5
  28.4
  26.5
  24.7
  23.0
  21.4
  19.9
  18.5
  17.2
  16.0
  14.8
  13.7
  12.7

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 (SHLO)

Valuation Ratios
P/E Ratio 36.1
Price to Sales 0.1
Price to Book 1.1
Price to Tangible Book
Price to Cash Flow 2.1
Price to Free Cash Flow 3.5
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 $1041.986 million for the last fiscal year's total revenue generated by Shiloh Industries. The default revenue input number comes from 0001 income statement of Shiloh Industries. 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 8.9% 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 5.8%, whose default value for SHLO is calculated based on our internal credit rating of Shiloh Industries, 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.
    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 98.5%.

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 6.8% for Shiloh Industries.

Corporate tax rate of 27% is the nominal tax rate for Shiloh Industries. 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 27.7%.

Life of production assets of 7.4 years is the average useful life of capital assets used in Shiloh Industries 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 6.9%. 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 - $188.321 million for Shiloh Industries - 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 23.41 million for Shiloh Industries 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 at the current share price and the inputted number of shares is $0.2 billion.

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COMPANY NEWS

▶ Shiloh: Fiscal 3Q Earnings Snapshot   [Sep-07-18 07:13AM  Associated Press]
▶ Does Shiloh Industries Inc (NASDAQ:SHLO) Fall With The Market?   [Sep-05-18 03:49PM  Simply Wall St.]
▶ Shiloh: Fiscal 2Q Earnings Snapshot   [Jun-06-18 07:12AM  Associated Press]
▶ Shiloh posts 1Q profit   [Mar-08-18 08:25AM  Associated Press]
▶ Shiloh reports 4Q loss   [Jan-05-18 07:16AM  Associated Press]
▶ Shiloh Industries Opens Customer Service Center in Germany   [Nov-15-17 03:02AM  GlobeNewswire]
▶ Shiloh reports 3Q loss   [Aug-29-17 10:15PM  Associated Press]
▶ Shiloh Industries, Inc. Announces Common Stock Offering   [Jul-10-17 04:01PM  GlobeNewswire]
▶ Shiloh Industries Added to Russell 3000® Index   [Jun-26-17 07:00AM  GlobeNewswire]
▶ Shiloh posts 2Q profit   [Jun-01-17 07:31AM  Associated Press]
▶ Three Small Caps to Buy on the Pullback   [10:28AM  Investopedia]
▶ Shiloh reports 1Q loss   [07:04AM  Associated Press]
▶ Correction: Earns-Shiloh Industries story   [Feb-02-17 04:03PM  Associated Press]

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