Intrinsic value of Workhorse Group - WKHS

Previous Close

$0.54

  Intrinsic Value

$0.02

stock screener

  Rating & Target

str. sell

-96%

Previous close

$0.54

 
Intrinsic value

$0.02

 
Up/down potential

-96%

 
Rating

str. sell

We calculate the intrinsic value of WKHS 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 0.0

 

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, %
  2.00
  2.30
  2.57
  2.81
  3.03
  3.23
  3.41
  3.57
  3.71
  3.84
  3.95
  4.06
  4.15
  4.24
  4.31
  4.38
  4.44
  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
Revenue, $m
  11
  11
  12
  12
  12
  13
  13
  14
  14
  15
  15
  16
  16
  17
  18
  19
  20
  20
  21
  22
  23
  24
  26
  27
  28
  29
  31
  32
  34
  36
Variable operating expenses, $m
  44
  45
  46
  48
  49
  51
  53
  54
  56
  59
  61
  63
  66
  69
  72
  75
  78
  82
  85
  89
  94
  98
  102
  107
  112
  118
  123
  129
  136
  142
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
  44
  45
  46
  48
  49
  51
  53
  54
  56
  59
  61
  63
  66
  69
  72
  75
  78
  82
  85
  89
  94
  98
  102
  107
  112
  118
  123
  129
  136
  142
Operating income, $m
  -33
  -34
  -35
  -36
  -37
  -38
  -39
  -41
  -42
  -44
  -46
  -48
  -49
  -52
  -54
  -56
  -59
  -61
  -64
  -67
  -70
  -73
  -77
  -81
  -84
  -88
  -93
  -97
  -102
  -107
EBITDA, $m
  -33
  -33
  -34
  -35
  -36
  -37
  -39
  -40
  -42
  -43
  -45
  -47
  -49
  -51
  -53
  -55
  -58
  -60
  -63
  -66
  -69
  -72
  -76
  -79
  -83
  -87
  -91
  -95
  -100
  -105
Interest expense (income), $m
  0
  0
  0
  0
  0
  0
  0
  0
  1
  1
  1
  1
  1
  1
  1
  1
  1
  1
  1
  1
  1
  1
  1
  1
  1
  1
  1
  2
  2
  2
  2
Earnings before tax, $m
  -34
  -34
  -35
  -36
  -37
  -39
  -40
  -41
  -43
  -44
  -46
  -48
  -50
  -52
  -55
  -57
  -60
  -62
  -65
  -68
  -71
  -75
  -78
  -82
  -86
  -90
  -94
  -99
  -104
  -109
Tax expense, $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
Net income, $m
  -34
  -34
  -35
  -36
  -37
  -39
  -40
  -41
  -43
  -44
  -46
  -48
  -50
  -52
  -55
  -57
  -60
  -62
  -65
  -68
  -71
  -75
  -78
  -82
  -86
  -90
  -94
  -99
  -104
  -109

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
  17
  17
  17
  18
  18
  19
  20
  20
  21
  22
  23
  24
  25
  26
  27
  28
  29
  31
  32
  34
  35
  37
  38
  40
  42
  44
  46
  49
  51
  53
Adjusted assets (=assets-cash), $m
  17
  17
  17
  18
  18
  19
  20
  20
  21
  22
  23
  24
  25
  26
  27
  28
  29
  31
  32
  34
  35
  37
  38
  40
  42
  44
  46
  49
  51
  53
Revenue / Adjusted assets
  0.647
  0.647
  0.706
  0.667
  0.667
  0.684
  0.650
  0.700
  0.667
  0.682
  0.652
  0.667
  0.640
  0.654
  0.667
  0.679
  0.690
  0.645
  0.656
  0.647
  0.657
  0.649
  0.684
  0.675
  0.667
  0.659
  0.674
  0.653
  0.667
  0.679
Average production assets, $m
  6
  6
  6
  6
  6
  7
  7
  7
  7
  8
  8
  8
  9
  9
  9
  10
  10
  11
  11
  12
  12
  13
  14
  14
  15
  16
  16
  17
  18
  19
Working capital, $m
  0
  0
  1
  1
  1
  1
  1
  1
  1
  1
  1
  1
  1
  1
  1
  1
  1
  1
  1
  1
  1
  1
  1
  1
  1
  1
  1
  1
  1
  2
Total debt, $m
  7
  7
  8
  8
  8
  9
  9
  10
  11
  11
  12
  13
  13
  14
  15
  16
  17
  18
  19
  20
  21
  23
  24
  26
  27
  29
  30
  32
  34
  36
Total liabilities, $m
  13
  13
  14
  14
  15
  15
  16
  16
  17
  17
  18
  19
  19
  20
  21
  22
  23
  24
  25
  26
  28
  29
  30
  32
  33
  35
  36
  38
  40
  42
Total equity, $m
  4
  4
  4
  4
  4
  4
  4
  4
  5
  5
  5
  5
  5
  5
  6
  6
  6
  7
  7
  7
  7
  8
  8
  9
  9
  9
  10
  10
  11
  11
Total liabilities and equity, $m
  17
  17
  18
  18
  19
  19
  20
  20
  22
  22
  23
  24
  24
  25
  27
  28
  29
  31
  32
  33
  35
  37
  38
  41
  42
  44
  46
  48
  51
  53
Debt-to-equity ratio
  1.960
  2.000
  2.040
  2.090
  2.130
  2.180
  2.230
  2.280
  2.330
  2.380
  2.430
  2.480
  2.530
  2.580
  2.620
  2.670
  2.710
  2.760
  2.800
  2.840
  2.870
  2.910
  2.950
  2.980
  3.010
  3.040
  3.070
  3.100
  3.130
  3.160
Adjusted equity ratio
  0.213
  0.213
  0.213
  0.213
  0.213
  0.213
  0.213
  0.213
  0.213
  0.213
  0.213
  0.213
  0.213
  0.213
  0.213
  0.213
  0.213
  0.213
  0.213
  0.213
  0.213
  0.213
  0.213
  0.213
  0.213
  0.213
  0.213
  0.213
  0.213
  0.213

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  -34
  -34
  -35
  -36
  -37
  -39
  -40
  -41
  -43
  -44
  -46
  -48
  -50
  -52
  -55
  -57
  -60
  -62
  -65
  -68
  -71
  -75
  -78
  -82
  -86
  -90
  -94
  -99
  -104
  -109
Depreciation, amort., depletion, $m
  1
  1
  1
  1
  1
  1
  1
  1
  1
  1
  1
  1
  1
  1
  1
  1
  1
  1
  1
  1
  1
  1
  1
  1
  1
  1
  2
  2
  2
  2
Funds from operations, $m
  -33
  -34
  -35
  -36
  -37
  -38
  -39
  -41
  -42
  -44
  -45
  -47
  -49
  -51
  -54
  -56
  -59
  -61
  -64
  -67
  -70
  -73
  -77
  -80
  -84
  -88
  -93
  -97
  -102
  -107
Change in working capital, $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 operations, $m
  -33
  -34
  -35
  -36
  -37
  -38
  -39
  -41
  -42
  -44
  -46
  -47
  -49
  -51
  -54
  -56
  -59
  -61
  -64
  -67
  -70
  -73
  -77
  -81
  -84
  -88
  -93
  -97
  -102
  -107
Maintenance CAPEX, $m
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -2
  -2
  -2
New CAPEX, $m
  0
  0
  0
  0
  0
  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
Cash from investing activities, $m
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -2
  -2
  -2
  -2
  -2
  -2
  -2
  -2
  -3
  -3
  -3
Free cash flow, $m
  -34
  -34
  -35
  -36
  -38
  -39
  -40
  -42
  -43
  -45
  -47
  -48
  -51
  -53
  -55
  -57
  -60
  -63
  -66
  -69
  -72
  -75
  -79
  -82
  -86
  -91
  -95
  -100
  -104
  -109
Issuance/(repayment) of debt, $m
  0
  0
  0
  0
  0
  0
  1
  1
  1
  1
  1
  1
  1
  1
  1
  1
  1
  1
  1
  1
  1
  1
  1
  1
  2
  2
  2
  2
  2
  2
Issuance/(repurchase) of shares, $m
  34
  34
  35
  36
  37
  39
  40
  41
  43
  45
  46
  48
  50
  53
  55
  57
  60
  62
  65
  68
  72
  75
  78
  82
  86
  90
  95
  99
  104
  109
Cash from financing (excl. dividends), $m  
  34
  34
  35
  36
  37
  39
  41
  42
  44
  46
  47
  49
  51
  54
  56
  58
  61
  63
  66
  69
  73
  76
  79
  83
  88
  92
  97
  101
  106
  111
Total cash flow (excl. dividends), $m
  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
  1
  1
  1
  2
  2
Retained Cash Flow (-), $m
  -34
  -34
  -35
  -36
  -37
  -39
  -40
  -41
  -43
  -45
  -46
  -48
  -50
  -53
  -55
  -57
  -60
  -62
  -65
  -68
  -72
  -75
  -78
  -82
  -86
  -90
  -95
  -99
  -104
  -109
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
  -34
  -34
  -35
  -36
  -37
  -38
  -40
  -41
  -42
  -44
  -46
  -48
  -50
  -52
  -54
  -56
  -59
  -62
  -64
  -67
  -71
  -74
  -77
  -81
  -85
  -89
  -93
  -98
  -102
  -107
Discount rate, %
  7.40
  7.77
  8.16
  8.57
  8.99
  9.44
  9.92
  10.41
  10.93
  11.48
  12.05
  12.66
  13.29
  13.95
  14.65
  15.38
  16.15
  16.96
  17.81
  18.70
  19.63
  20.62
  21.65
  22.73
  23.87
  25.06
  26.31
  27.63
  29.01
  30.46
PV of cash for distribution, $m
  -31
  -29
  -28
  -26
  -24
  -22
  -20
  -19
  -17
  -15
  -13
  -11
  -10
  -8
  -7
  -6
  -5
  -4
  -3
  -2
  -2
  -1
  -1
  -1
  0
  0
  0
  0
  0
  0
Current shareholders' claim on cash, %
  42.5
  17.9
  7.5
  3.2
  1.3
  0.6
  0.2
  0.1
  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
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0

Workhorse Group, Inc., formerly AMP Holding Inc., is a development-stage company. The Company designs, develops, manufactures and sells medium-duty trucks with powertrain components under the Workhorse chassis brand. The Company's products include trucks comprising powertrain and chassis. Its powertrain products include E-GEN and E-100. Its chassis products include W88, W22, W42 and W62. E-GEN is an electric drive, transmission-free system, which has a gasoline/propane or compressed natural gas (CNG) engine that functions as an auxiliary generator. E-100, an all-electric, medium-duty truck, is an electric power-train. It focuses on offering W88 chassis with gross vehicle weight (GVW) ratings of 10,000 to 26,000 pounds. The W22 chassis is designed to meet the needs of the recreational vehicle market for weight ratings till over 26,000 GVW. The W42 chassis is designed for the 12,000 to 14,500 GVW vehicle market. The W62 chassis is designed for the 19,500 to 23,500 GVW vehicle market.

FINANCIAL RATIOS  of  Workhorse Group (WKHS)

Valuation Ratios
P/E Ratio -0.7
Price to Sales 2.5
Price to Book 3.7
Price to Tangible Book
Price to Cash Flow -0.8
Price to Free Cash Flow -0.7
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 0
LT Debt to Equity 50%
Total Debt to Equity 50%
Interest Coverage 0
Management Effectiveness
Return On Assets -160%
Ret/ On Assets - 3 Yr. Avg. -130%
Return On Total Capital -222.2%
Ret/ On T. Cap. - 3 Yr. Avg. -191.9%
Return On Equity 0%
Return On Equity - 3 Yr. Avg. 275.6%
Asset Turnover 0.5
Profitability Ratios
Gross Margin -116.7%
Gross Margin - 3 Yr. Avg. -38.9%
EBITDA Margin -333.3%
EBITDA Margin - 3 Yr. Avg. -111.1%
Operating Margin -333.3%
Oper. Margin - 3 Yr. Avg. -111.1%
Pre-Tax Margin -333.3%
Pre-Tax Margin - 3 Yr. Avg. -111.1%
Net Profit Margin -333.3%
Net Profit Margin - 3 Yr. Avg. -111.1%
Effective Tax Rate 0%
Eff/ Tax Rate - 3 Yr. Avg. 0%
Payout Ratio 0%

WKHS stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the WKHS stock intrinsic value calculation we used $10.84646 million for the last fiscal year's total revenue generated by Workhorse Group. The default revenue input number comes from 0001 income statement of Workhorse Group. 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 WKHS stock valuation model: a) initial revenue growth rate of 2% 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 7.4%, whose default value for WKHS is calculated based on our internal credit rating of Workhorse Group, 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 Workhorse Group.
    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 WKHS stock the variable cost ratio is equal to 400%.

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 WKHS 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 Workhorse Group.

Corporate tax rate of 27% is the nominal tax rate for Workhorse Group. 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 WKHS 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 WKHS are equal to 52.7%.

Life of production assets of 10.5 years is the average useful life of capital assets used in Workhorse Group 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 WKHS is equal to 4.4%. 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 - $3.511564 million for Workhorse Group - 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 45.982 million for Workhorse Group 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 Workhorse Group at the current share price and the inputted number of shares is $0.0 billion.

RELATED COMPANIES Price Int.Val. Rating
SPAR Spartan Motors 7.16 5.16  str.sell
F Ford Motor 8.82 14.28  buy
NAV Navistar Inter 28.69 37.13  hold
GM General Motors 34.69 58.76  str.buy
WBC WABCO Holdings 108.06 437.37  str.buy

COMPANY NEWS

▶ Workhorse: 3Q Earnings Snapshot   [08:42AM  Associated Press]
▶ These Cincinnati stocks took the biggest hit amid Dows worst loss since February   [Oct-10-18 05:20PM  American City Business Journals]
▶ Cincinnati electric vehicle company to sell 9 million shares of stock   [Aug-09-18 12:37PM  American City Business Journals]
▶ Workhorse: 2Q Earnings Snapshot   [Aug-06-18 05:17PM  Associated Press]
▶ EXCLUSIVE: Cincinnati firm to fulfill largest electric truck order ever   [Jul-12-18 02:20PM  American City Business Journals]
▶ Workhorse: 1Q Earnings Snapshot   [May-09-18 05:17PM  Associated Press]
▶ This Albany tech company is powering FedEx vans with hydrogen   [10:35AM  American City Business Journals]
▶ Workhorse Group Closes Private Placement   [Apr-30-18 04:05PM  PR Newswire]
▶ Workhorse reports 4Q loss   [Mar-14-18 04:48PM  Associated Press]
▶ Workhorse Group Q4 Earnings Preview   [09:36AM  Benzinga]
▶ High Growth Stocks To Invest In   [Mar-09-18 11:02AM  Simply Wall St.]
▶ UPS 'breaking a key barrier' with electric truck deployment, partnership (Video)   [Feb-23-18 01:20PM  American City Business Journals]
▶ UPS adding to electric truck fleet   [Feb-22-18 04:30PM  Associated Press]
▶ 3 Micro-Cap Tech Stocks To Watch In 2018   [Jan-24-18 02:41PM  Benzinga]
▶ Workhorse makes SureFly its own business   [Dec-27-17 03:30PM  Autoblog]
▶ December Top Growth Stocks   [Dec-14-17 11:02AM  Simply Wall St.]
▶ Reinventing the helicopter with an eight-propeller machine   [Dec-11-17 01:02PM  Fox Business Videos]
▶ Top Growth Stocks This Week   [11:02AM  Simply Wall St.]
▶ Workhorse reports 3Q loss   [Nov-07-17 09:43AM  Associated Press]

CONTACT US       ASSET ALLOCATION

About X-FIN       Site news       Privacy policy       Terms of use       FAQ

Copyright © X-FIN.com 2005-2018. All rigths reserved.