Intrinsic value of Tecnoglass Inc. - TGLS

Previous Close

$6.40

  Intrinsic Value

$7.71

stock screener

  Rating & Target

buy

+20%

Previous close

$6.40

 
Intrinsic value

$7.71

 
Up/down potential

+20%

 
Rating

buy

We calculate the intrinsic value of TGLS 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, %
  16.10
  14.99
  13.99
  13.09
  12.28
  11.55
  10.90
  10.31
  9.78
  9.30
  8.87
  8.48
  8.13
  7.82
  7.54
  7.29
  7.06
  6.85
  6.67
  6.50
  6.35
  6.21
  6.09
  5.98
  5.89
  5.80
  5.72
  5.65
  5.58
  5.52
Revenue, $m
  431
  495
  565
  639
  717
  800
  887
  978
  1,074
  1,174
  1,278
  1,386
  1,499
  1,617
  1,738
  1,865
  1,997
  2,133
  2,276
  2,424
  2,578
  2,738
  2,904
  3,078
  3,259
  3,448
  3,646
  3,851
  4,066
  4,291
Variable operating expenses, $m
  333
  382
  435
  492
  552
  615
  682
  752
  825
  901
  978
  1,061
  1,147
  1,237
  1,330
  1,427
  1,528
  1,632
  1,741
  1,854
  1,972
  2,095
  2,222
  2,355
  2,494
  2,638
  2,789
  2,947
  3,111
  3,283
Fixed operating expenses, $m
  39
  40
  41
  41
  42
  43
  44
  45
  46
  47
  48
  49
  50
  52
  53
  54
  55
  56
  57
  59
  60
  61
  63
  64
  65
  67
  68
  70
  71
  73
Total operating expenses, $m
  372
  422
  476
  533
  594
  658
  726
  797
  871
  948
  1,026
  1,110
  1,197
  1,289
  1,383
  1,481
  1,583
  1,688
  1,798
  1,913
  2,032
  2,156
  2,285
  2,419
  2,559
  2,705
  2,857
  3,017
  3,182
  3,356
Operating income, $m
  59
  73
  89
  105
  123
  141
  161
  181
  203
  225
  252
  276
  302
  328
  356
  384
  414
  445
  477
  511
  545
  582
  620
  659
  700
  743
  788
  835
  884
  935
EBITDA, $m
  87
  105
  124
  145
  167
  190
  215
  240
  267
  296
  325
  356
  387
  421
  455
  491
  528
  567
  607
  649
  693
  738
  785
  835
  886
  940
  996
  1,055
  1,116
  1,180
Interest expense (income), $m
  0
  22
  27
  33
  39
  46
  52
  60
  67
  75
  84
  93
  102
  111
  121
  131
  142
  153
  165
  177
  189
  202
  216
  230
  244
  260
  276
  292
  309
  328
  346
Earnings before tax, $m
  37
  46
  56
  66
  77
  89
  101
  114
  127
  141
  159
  175
  190
  207
  224
  242
  261
  280
  300
  321
  343
  366
  390
  415
  440
  467
  496
  525
  556
  588
Tax expense, $m
  10
  12
  15
  18
  21
  24
  27
  31
  34
  38
  43
  47
  51
  56
  61
  65
  70
  76
  81
  87
  93
  99
  105
  112
  119
  126
  134
  142
  150
  159
Net income, $m
  27
  34
  41
  48
  56
  65
  74
  83
  93
  103
  116
  127
  139
  151
  164
  177
  190
  204
  219
  235
  251
  267
  285
  303
  322
  341
  362
  383
  406
  430

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
  569
  654
  746
  843
  947
  1,057
  1,172
  1,292
  1,419
  1,551
  1,688
  1,832
  1,981
  2,135
  2,296
  2,464
  2,638
  2,818
  3,006
  3,202
  3,405
  3,616
  3,837
  4,066
  4,306
  4,555
  4,816
  5,088
  5,372
  5,668
Adjusted assets (=assets-cash), $m
  569
  654
  746
  843
  947
  1,057
  1,172
  1,292
  1,419
  1,551
  1,688
  1,832
  1,981
  2,135
  2,296
  2,464
  2,638
  2,818
  3,006
  3,202
  3,405
  3,616
  3,837
  4,066
  4,306
  4,555
  4,816
  5,088
  5,372
  5,668
Revenue / Adjusted assets
  0.757
  0.757
  0.757
  0.758
  0.757
  0.757
  0.757
  0.757
  0.757
  0.757
  0.757
  0.757
  0.757
  0.757
  0.757
  0.757
  0.757
  0.757
  0.757
  0.757
  0.757
  0.757
  0.757
  0.757
  0.757
  0.757
  0.757
  0.757
  0.757
  0.757
Average production assets, $m
  204
  235
  268
  303
  340
  379
  420
  464
  509
  556
  606
  657
  711
  766
  824
  884
  946
  1,011
  1,079
  1,149
  1,222
  1,298
  1,377
  1,459
  1,545
  1,635
  1,728
  1,826
  1,927
  2,034
Working capital, $m
  183
  211
  241
  272
  305
  341
  378
  417
  458
  500
  544
  591
  639
  689
  741
  795
  851
  909
  969
  1,032
  1,098
  1,166
  1,237
  1,311
  1,389
  1,469
  1,553
  1,641
  1,732
  1,828
Total debt, $m
  301
  363
  430
  501
  577
  657
  741
  829
  921
  1,018
  1,118
  1,223
  1,331
  1,444
  1,562
  1,684
  1,811
  1,943
  2,080
  2,223
  2,371
  2,526
  2,686
  2,854
  3,029
  3,211
  3,401
  3,599
  3,807
  4,023
Total liabilities, $m
  415
  478
  544
  616
  691
  771
  855
  943
  1,036
  1,132
  1,232
  1,337
  1,446
  1,559
  1,676
  1,799
  1,925
  2,057
  2,195
  2,337
  2,486
  2,640
  2,801
  2,968
  3,143
  3,325
  3,516
  3,714
  3,921
  4,138
Total equity, $m
  154
  177
  201
  228
  256
  285
  316
  349
  383
  419
  456
  495
  535
  577
  620
  665
  712
  761
  812
  864
  919
  976
  1,036
  1,098
  1,163
  1,230
  1,300
  1,374
  1,450
  1,530
Total liabilities and equity, $m
  569
  655
  745
  844
  947
  1,056
  1,171
  1,292
  1,419
  1,551
  1,688
  1,832
  1,981
  2,136
  2,296
  2,464
  2,637
  2,818
  3,007
  3,201
  3,405
  3,616
  3,837
  4,066
  4,306
  4,555
  4,816
  5,088
  5,371
  5,668
Debt-to-equity ratio
  1.960
  2.060
  2.140
  2.200
  2.260
  2.300
  2.340
  2.380
  2.400
  2.430
  2.450
  2.470
  2.490
  2.510
  2.520
  2.530
  2.540
  2.550
  2.560
  2.570
  2.580
  2.590
  2.590
  2.600
  2.610
  2.610
  2.620
  2.620
  2.620
  2.630
Adjusted equity ratio
  0.270
  0.270
  0.270
  0.270
  0.270
  0.270
  0.270
  0.270
  0.270
  0.270
  0.270
  0.270
  0.270
  0.270
  0.270
  0.270
  0.270
  0.270
  0.270
  0.270
  0.270
  0.270
  0.270
  0.270
  0.270
  0.270
  0.270
  0.270
  0.270
  0.270

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  27
  34
  41
  48
  56
  65
  74
  83
  93
  103
  116
  127
  139
  151
  164
  177
  190
  204
  219
  235
  251
  267
  285
  303
  322
  341
  362
  383
  406
  430
Depreciation, amort., depletion, $m
  28
  32
  36
  40
  44
  49
  54
  59
  65
  70
  73
  79
  86
  92
  99
  107
  114
  122
  130
  138
  147
  156
  166
  176
  186
  197
  208
  220
  232
  245
Funds from operations, $m
  55
  65
  76
  88
  101
  114
  128
  142
  158
  174
  189
  207
  225
  243
  263
  283
  304
  326
  349
  373
  398
  424
  450
  478
  508
  538
  570
  603
  638
  675
Change in working capital, $m
  25
  28
  30
  31
  33
  35
  37
  39
  41
  43
  44
  46
  48
  50
  52
  54
  56
  58
  61
  63
  66
  68
  71
  74
  77
  80
  84
  88
  92
  96
Cash from operations, $m
  29
  38
  47
  57
  67
  78
  91
  103
  117
  131
  145
  160
  177
  193
  211
  229
  248
  268
  289
  310
  332
  355
  379
  404
  430
  458
  486
  516
  547
  579
Maintenance CAPEX, $m
  -21
  -25
  -28
  -32
  -36
  -41
  -46
  -51
  -56
  -61
  -67
  -73
  -79
  -86
  -92
  -99
  -107
  -114
  -122
  -130
  -138
  -147
  -156
  -166
  -176
  -186
  -197
  -208
  -220
  -232
New CAPEX, $m
  -28
  -31
  -33
  -35
  -37
  -39
  -41
  -43
  -45
  -47
  -49
  -51
  -53
  -56
  -58
  -60
  -62
  -65
  -67
  -70
  -73
  -76
  -79
  -82
  -86
  -90
  -93
  -98
  -102
  -106
Cash from investing activities, $m
  -49
  -56
  -61
  -67
  -73
  -80
  -87
  -94
  -101
  -108
  -116
  -124
  -132
  -142
  -150
  -159
  -169
  -179
  -189
  -200
  -211
  -223
  -235
  -248
  -262
  -276
  -290
  -306
  -322
  -338
Free cash flow, $m
  -20
  -18
  -14
  -11
  -7
  -2
  4
  9
  16
  22
  29
  36
  44
  52
  61
  70
  79
  89
  99
  110
  121
  132
  144
  156
  169
  182
  196
  210
  225
  240
Issuance/(repayment) of debt, $m
  58
  62
  67
  71
  76
  80
  84
  88
  92
  96
  100
  105
  109
  113
  118
  122
  127
  132
  137
  143
  148
  154
  161
  168
  175
  182
  190
  198
  207
  217
Issuance/(repurchase) of shares, $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 from financing (excl. dividends), $m  
  58
  62
  67
  71
  76
  80
  84
  88
  92
  96
  100
  105
  109
  113
  118
  122
  127
  132
  137
  143
  148
  154
  161
  168
  175
  182
  190
  198
  207
  217
Total cash flow (excl. dividends), $m
  38
  45
  52
  61
  69
  78
  88
  98
  108
  119
  129
  141
  153
  165
  178
  192
  206
  221
  236
  253
  269
  287
  305
  324
  344
  364
  386
  408
  432
  457
Retained Cash Flow (-), $m
  -21
  -23
  -25
  -26
  -28
  -30
  -31
  -33
  -34
  -36
  -37
  -39
  -40
  -42
  -43
  -45
  -47
  -49
  -51
  -53
  -55
  -57
  -59
  -62
  -65
  -67
  -70
  -73
  -77
  -80
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
  17
  22
  28
  34
  41
  49
  57
  65
  74
  83
  92
  102
  113
  124
  135
  147
  159
  172
  186
  200
  214
  229
  245
  262
  279
  297
  316
  335
  355
  377
Discount rate, %
  10.10
  10.61
  11.14
  11.69
  12.28
  12.89
  13.53
  14.21
  14.92
  15.67
  16.45
  17.27
  18.14
  19.05
  20.00
  21.00
  22.05
  23.15
  24.31
  25.52
  26.80
  28.14
  29.55
  31.02
  32.57
  34.20
  35.91
  37.71
  39.59
  41.57
PV of cash for distribution, $m
  15
  18
  20
  22
  23
  23
  23
  22
  21
  19
  17
  15
  13
  11
  9
  7
  5
  4
  3
  2
  1
  1
  1
  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
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0

Tecnoglass Inc., through its subsidiaries, manufactures and sells architectural glass and windows for the residential and commercial construction industries in North, Central, and South America. The company offers soft coat, laminated/thermo-laminated, thermo-acoustic, tempered, silk-screened, curved, and digital print glass. It also produces, exports, imports, and markets aluminum products, such as profiles, rods, bars, plates, tubes, and other hardware used in the manufacture of architectural glass settings, including windows, doors, spatial separators, and similar products. In addition, the company provides floating facades, windows and doors, commercial display windows, hurricane-proof windows, automatic doors, bathroom dividers, photovoltaic structures, and other components of architectural systems. Tecnoglass Inc. markets and sells its products under the Tecnoglass, ES Windows, and Alutions brands through internal sales representatives and independent sales representatives, as wells as directly to distributors. The company was founded in 1984 and is headquartered in Barranquilla, Colombia. Tecnoglass Inc.operates as a subsidiary of Energy Holding Corporation.

FINANCIAL RATIOS  of  Tecnoglass Inc. (TGLS)

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%

TGLS stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the TGLS stock intrinsic value calculation we used $371 million for the last fiscal year's total revenue generated by Tecnoglass Inc.. The default revenue input number comes from 0001 income statement of Tecnoglass 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 TGLS stock valuation model: a) initial revenue growth rate of 16.1% 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 10.1%, whose default value for TGLS is calculated based on our internal credit rating of Tecnoglass 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 Tecnoglass 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 TGLS stock the variable cost ratio is equal to 77.4%.

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 TGLS 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 9.1% for Tecnoglass Inc..

Corporate tax rate of 27% is the nominal tax rate for Tecnoglass 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 TGLS 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 TGLS are equal to 47.4%.

Life of production assets of 8.3 years is the average useful life of capital assets used in Tecnoglass 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 TGLS is equal to 42.6%. 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 - $132.356 million for Tecnoglass 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 38.631 million for Tecnoglass 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 Tecnoglass Inc. at the current share price and the inputted number of shares is $0.2 billion.

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