Intrinsic value of Willdan Group, Inc. - WLDN

Previous Close

$40.24

  Intrinsic Value

$629.72

stock screener

  Rating & Target

str. buy

+999%

Previous close

$40.24

 
Intrinsic value

$629.72

 
Up/down potential

+999%

 
Rating

str. buy

We calculate the intrinsic value of WLDN 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 0.4

 

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, %
  34.70
  31.73
  29.06
  26.65
  24.49
  22.54
  20.78
  19.21
  17.78
  16.51
  15.36
  14.32
  13.39
  12.55
  11.79
  11.11
  10.50
  9.95
  9.46
  9.01
  8.61
  8.25
  7.92
  7.63
  7.37
  7.13
  6.92
  6.73
  6.55
  6.40
Revenue, $m
  366
  483
  623
  789
  982
  1,203
  1,453
  1,733
  2,041
  2,378
  2,743
  3,136
  3,555
  4,001
  4,473
  4,971
  5,493
  6,039
  6,611
  7,206
  7,827
  8,473
  9,144
  9,842
  10,567
  11,321
  12,104
  12,918
  13,765
  14,646
Variable operating expenses, $m
  65
  81
  101
  124
  151
  181
  216
  255
  297
  344
  381
  435
  493
  555
  621
  690
  762
  838
  918
  1,000
  1,086
  1,176
  1,269
  1,366
  1,467
  1,571
  1,680
  1,793
  1,911
  2,033
Fixed operating expenses, $m
  218
  222
  227
  232
  237
  243
  248
  254
  259
  265
  271
  277
  283
  289
  295
  302
  308
  315
  322
  329
  336
  344
  351
  359
  367
  375
  383
  392
  400
  409
Total operating expenses, $m
  283
  303
  328
  356
  388
  424
  464
  509
  556
  609
  652
  712
  776
  844
  916
  992
  1,070
  1,153
  1,240
  1,329
  1,422
  1,520
  1,620
  1,725
  1,834
  1,946
  2,063
  2,185
  2,311
  2,442
Operating income, $m
  84
  179
  295
  433
  594
  779
  990
  1,224
  1,484
  1,769
  2,091
  2,424
  2,779
  3,157
  3,557
  3,979
  4,422
  4,886
  5,371
  5,877
  6,404
  6,953
  7,524
  8,117
  8,734
  9,375
  10,041
  10,734
  11,454
  12,204
EBITDA, $m
  102
  199
  317
  457
  620
  808
  1,021
  1,260
  1,523
  1,812
  2,125
  2,462
  2,823
  3,206
  3,612
  4,040
  4,489
  4,960
  5,452
  5,965
  6,500
  7,056
  7,635
  8,237
  8,862
  9,513
  10,188
  10,891
  11,622
  12,383
Interest expense (income), $m
  0
  4
  7
  11
  15
  20
  26
  33
  41
  50
  59
  70
  81
  94
  107
  121
  135
  151
  167
  184
  202
  221
  240
  261
  282
  303
  326
  350
  374
  400
  426
Earnings before tax, $m
  80
  172
  284
  418
  574
  753
  956
  1,184
  1,435
  1,709
  2,022
  2,343
  2,686
  3,051
  3,437
  3,844
  4,271
  4,719
  5,187
  5,675
  6,183
  6,713
  7,263
  7,835
  8,430
  9,049
  9,691
  10,360
  11,055
  11,778
Tax expense, $m
  22
  46
  77
  113
  155
  203
  258
  320
  387
  462
  546
  632
  725
  824
  928
  1,038
  1,153
  1,274
  1,400
  1,532
  1,669
  1,812
  1,961
  2,116
  2,276
  2,443
  2,617
  2,797
  2,985
  3,180
Net income, $m
  58
  126
  208
  305
  419
  550
  698
  864
  1,047
  1,248
  1,476
  1,710
  1,961
  2,227
  2,509
  2,806
  3,118
  3,445
  3,786
  4,143
  4,514
  4,900
  5,302
  5,720
  6,154
  6,605
  7,075
  7,562
  8,070
  8,598

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
  407
  536
  691
  876
  1,090
  1,336
  1,613
  1,923
  2,265
  2,639
  3,044
  3,480
  3,946
  4,441
  4,965
  5,517
  6,096
  6,703
  7,337
  7,998
  8,687
  9,404
  10,149
  10,923
  11,728
  12,565
  13,434
  14,338
  15,278
  16,255
Adjusted assets (=assets-cash), $m
  407
  536
  691
  876
  1,090
  1,336
  1,613
  1,923
  2,265
  2,639
  3,044
  3,480
  3,946
  4,441
  4,965
  5,517
  6,096
  6,703
  7,337
  7,998
  8,687
  9,404
  10,149
  10,923
  11,728
  12,565
  13,434
  14,338
  15,278
  16,255
Revenue / Adjusted assets
  0.899
  0.901
  0.902
  0.901
  0.901
  0.900
  0.901
  0.901
  0.901
  0.901
  0.901
  0.901
  0.901
  0.901
  0.901
  0.901
  0.901
  0.901
  0.901
  0.901
  0.901
  0.901
  0.901
  0.901
  0.901
  0.901
  0.901
  0.901
  0.901
  0.901
Average production assets, $m
  73
  97
  125
  158
  196
  241
  291
  347
  408
  476
  549
  627
  711
  800
  895
  994
  1,099
  1,208
  1,322
  1,441
  1,565
  1,695
  1,829
  1,968
  2,113
  2,264
  2,421
  2,584
  2,753
  2,929
Working capital, $m
  52
  68
  88
  111
  138
  170
  205
  244
  288
  335
  387
  442
  501
  564
  631
  701
  774
  852
  932
  1,016
  1,104
  1,195
  1,289
  1,388
  1,490
  1,596
  1,707
  1,821
  1,941
  2,065
Total debt, $m
  128
  195
  276
  372
  484
  613
  758
  919
  1,098
  1,293
  1,504
  1,732
  1,975
  2,234
  2,507
  2,795
  3,098
  3,414
  3,745
  4,090
  4,450
  4,824
  5,213
  5,617
  6,038
  6,474
  6,928
  7,400
  7,890
  8,401
Total liabilities, $m
  212
  280
  361
  457
  569
  697
  842
  1,004
  1,182
  1,378
  1,589
  1,817
  2,060
  2,318
  2,592
  2,880
  3,182
  3,499
  3,830
  4,175
  4,535
  4,909
  5,298
  5,702
  6,122
  6,559
  7,013
  7,484
  7,975
  8,485
Total equity, $m
  194
  256
  330
  419
  521
  638
  771
  919
  1,083
  1,261
  1,455
  1,663
  1,886
  2,123
  2,373
  2,637
  2,914
  3,204
  3,507
  3,823
  4,152
  4,495
  4,851
  5,221
  5,606
  6,006
  6,422
  6,853
  7,303
  7,770
Total liabilities and equity, $m
  406
  536
  691
  876
  1,090
  1,335
  1,613
  1,923
  2,265
  2,639
  3,044
  3,480
  3,946
  4,441
  4,965
  5,517
  6,096
  6,703
  7,337
  7,998
  8,687
  9,404
  10,149
  10,923
  11,728
  12,565
  13,435
  14,337
  15,278
  16,255
Debt-to-equity ratio
  0.660
  0.760
  0.840
  0.890
  0.930
  0.960
  0.980
  1.000
  1.010
  1.030
  1.030
  1.040
  1.050
  1.050
  1.060
  1.060
  1.060
  1.070
  1.070
  1.070
  1.070
  1.070
  1.070
  1.080
  1.080
  1.080
  1.080
  1.080
  1.080
  1.080
Adjusted equity ratio
  0.478
  0.478
  0.478
  0.478
  0.478
  0.478
  0.478
  0.478
  0.478
  0.478
  0.478
  0.478
  0.478
  0.478
  0.478
  0.478
  0.478
  0.478
  0.478
  0.478
  0.478
  0.478
  0.478
  0.478
  0.478
  0.478
  0.478
  0.478
  0.478
  0.478

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  58
  126
  208
  305
  419
  550
  698
  864
  1,047
  1,248
  1,476
  1,710
  1,961
  2,227
  2,509
  2,806
  3,118
  3,445
  3,786
  4,143
  4,514
  4,900
  5,302
  5,720
  6,154
  6,605
  7,075
  7,562
  8,070
  8,598
Depreciation, amort., depletion, $m
  19
  20
  22
  24
  26
  29
  32
  35
  39
  43
  33
  38
  43
  49
  55
  61
  67
  74
  81
  88
  95
  103
  112
  120
  129
  138
  148
  158
  168
  179
Funds from operations, $m
  77
  146
  229
  329
  445
  579
  730
  899
  1,086
  1,291
  1,509
  1,748
  2,004
  2,276
  2,563
  2,866
  3,185
  3,518
  3,867
  4,230
  4,609
  5,003
  5,414
  5,840
  6,283
  6,743
  7,222
  7,720
  8,238
  8,776
Change in working capital, $m
  13
  16
  20
  23
  27
  31
  35
  39
  43
  47
  51
  55
  59
  63
  67
  70
  74
  77
  81
  84
  87
  91
  95
  98
  102
  106
  110
  115
  119
  124
Cash from operations, $m
  64
  129
  210
  305
  418
  548
  695
  860
  1,043
  1,244
  1,458
  1,693
  1,945
  2,213
  2,497
  2,796
  3,111
  3,441
  3,786
  4,146
  4,522
  4,912
  5,319
  5,741
  6,181
  6,637
  7,112
  7,605
  8,118
  8,652
Maintenance CAPEX, $m
  -3
  -4
  -6
  -8
  -10
  -12
  -15
  -18
  -21
  -25
  -29
  -33
  -38
  -43
  -49
  -55
  -61
  -67
  -74
  -81
  -88
  -95
  -103
  -112
  -120
  -129
  -138
  -148
  -158
  -168
New CAPEX, $m
  -19
  -23
  -28
  -33
  -39
  -44
  -50
  -56
  -62
  -67
  -73
  -79
  -84
  -89
  -94
  -99
  -104
  -109
  -114
  -119
  -124
  -129
  -134
  -140
  -145
  -151
  -157
  -163
  -169
  -176
Cash from investing activities, $m
  -22
  -27
  -34
  -41
  -49
  -56
  -65
  -74
  -83
  -92
  -102
  -112
  -122
  -132
  -143
  -154
  -165
  -176
  -188
  -200
  -212
  -224
  -237
  -252
  -265
  -280
  -295
  -311
  -327
  -344
Free cash flow, $m
  41
  102
  176
  265
  370
  491
  630
  786
  960
  1,151
  1,356
  1,581
  1,823
  2,080
  2,354
  2,642
  2,946
  3,265
  3,598
  3,947
  4,310
  4,688
  5,081
  5,490
  5,916
  6,358
  6,817
  7,295
  7,791
  8,308
Issuance/(repayment) of debt, $m
  55
  67
  81
  96
  112
  128
  145
  162
  179
  195
  212
  228
  243
  258
  273
  288
  302
  317
  331
  345
  360
  374
  389
  404
  420
  437
  454
  472
  491
  510
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  
  55
  67
  81
  96
  112
  128
  145
  162
  179
  195
  212
  228
  243
  258
  273
  288
  302
  317
  331
  345
  360
  374
  389
  404
  420
  437
  454
  472
  491
  510
Total cash flow (excl. dividends), $m
  96
  169
  257
  361
  482
  620
  775
  948
  1,139
  1,346
  1,567
  1,808
  2,066
  2,339
  2,627
  2,930
  3,249
  3,582
  3,929
  4,292
  4,669
  5,062
  5,470
  5,895
  6,336
  6,794
  7,271
  7,766
  8,282
  8,819
Retained Cash Flow (-), $m
  -50
  -62
  -74
  -88
  -102
  -117
  -133
  -148
  -163
  -179
  -194
  -208
  -223
  -237
  -250
  -264
  -277
  -290
  -303
  -316
  -329
  -343
  -356
  -370
  -385
  -400
  -416
  -432
  -449
  -467
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
  46
  107
  182
  273
  379
  502
  642
  800
  975
  1,168
  1,374
  1,600
  1,843
  2,102
  2,377
  2,667
  2,972
  3,292
  3,626
  3,976
  4,340
  4,719
  5,114
  5,524
  5,951
  6,394
  6,855
  7,334
  7,833
  8,351
Discount rate, %
  6.40
  6.72
  7.06
  7.41
  7.78
  8.17
  8.58
  9.01
  9.46
  9.93
  10.42
  10.95
  11.49
  12.07
  12.67
  13.31
  13.97
  14.67
  15.40
  16.17
  16.98
  17.83
  18.72
  19.66
  20.64
  21.67
  22.76
  23.89
  25.09
  26.34
PV of cash for distribution, $m
  43
  94
  149
  205
  261
  313
  361
  401
  432
  453
  461
  460
  448
  426
  397
  361
  322
  280
  238
  198
  161
  128
  99
  74
  55
  39
  27
  18
  12
  8
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

Willdan Group, Inc. is a holding company. The Company provides professional technical and consulting services to utilities, private industry and public agencies at all levels of government, primarily in California and New York. It operates through four segments: Energy Efficiency Services, Engineering Services, Public Finance Services and Homeland Security Services. The Energy Efficiency Services segment provides energy efficiency consulting services to utilities, state agencies, municipalities, private industry and non-profit organizations. The Engineering Services segment offers a range of engineering and planning services to its public and private sector clients. The Public Finance Services segment provides support for the various financing techniques employed by public agencies to finance their operations and infrastructure. The Homeland Security Services segment provides national preparedness, homeland security consulting, public safety and emergency response services.

FINANCIAL RATIOS  of  Willdan Group, Inc. (WLDN)

Valuation Ratios
P/E Ratio 42
Price to Sales 1.6
Price to Book 6.7
Price to Tangible Book
Price to Cash Flow 15.3
Price to Free Cash Flow 16.8
Growth Rates
Sales Growth Rate 54.8%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate 0%
Cap. Spend. - 3 Yr. Gr. Rate NaN%
Financial Strength
Quick Ratio 6
Current Ratio 0
LT Debt to Equity 6%
Total Debt to Equity 14%
Interest Coverage 0
Management Effectiveness
Return On Assets 8.9%
Ret/ On Assets - 3 Yr. Avg. 12.1%
Return On Total Capital 15.8%
Ret/ On T. Cap. - 3 Yr. Avg. 20.2%
Return On Equity 18.2%
Return On Equity - 3 Yr. Avg. 22%
Asset Turnover 2.3
Profitability Ratios
Gross Margin 50.2%
Gross Margin - 3 Yr. Avg. 60%
EBITDA Margin 6.7%
EBITDA Margin - 3 Yr. Avg. 6.9%
Operating Margin 5.7%
Oper. Margin - 3 Yr. Avg. 6.1%
Pre-Tax Margin 5.3%
Pre-Tax Margin - 3 Yr. Avg. 6%
Net Profit Margin 3.8%
Net Profit Margin - 3 Yr. Avg. 5%
Effective Tax Rate 27.3%
Eff/ Tax Rate - 3 Yr. Avg. 19.2%
Payout Ratio 0%

WLDN stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the WLDN stock intrinsic value calculation we used $272 million for the last fiscal year's total revenue generated by Willdan Group, Inc.. The default revenue input number comes from 0001 income statement of Willdan Group, 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 WLDN stock valuation model: a) initial revenue growth rate of 34.7% 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 6.4%, whose default value for WLDN is calculated based on our internal credit rating of Willdan Group, 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 Willdan Group, 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 WLDN stock the variable cost ratio is equal to 19.1%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $213 million in the base year in the intrinsic value calculation for WLDN 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 Willdan Group, Inc..

Corporate tax rate of 27% is the nominal tax rate for Willdan Group, 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 WLDN 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 WLDN are equal to 20%.

Life of production assets of 16.4 years is the average useful life of capital assets used in Willdan Group, 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 WLDN is equal to 14.1%. 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 - $144.289 million for Willdan Group, 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 11.016 million for Willdan Group, 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 Willdan Group, Inc. at the current share price and the inputted number of shares is $0.4 billion.

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