Intrinsic value of Westport Fuel Systems Inc - WPRT

Previous Close

$1.49

  Intrinsic Value

$46.82

stock screener

  Rating & Target

str. buy

+999%

Previous close

$1.49

 
Intrinsic value

$46.82

 
Up/down potential

+999%

 
Rating

str. buy

We calculate the intrinsic value of WPRT 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, %
  39.30
  35.87
  32.78
  30.00
  27.50
  25.25
  23.23
  21.41
  19.77
  18.29
  16.96
  15.76
  14.69
  13.72
  12.85
  12.06
  11.36
  10.72
  10.15
  9.63
  9.17
  8.75
  8.38
  8.04
  7.74
  7.46
  7.22
  6.99
  6.80
  6.62
Revenue, $m
  344
  467
  621
  807
  1,029
  1,289
  1,588
  1,928
  2,309
  2,732
  3,195
  3,698
  4,242
  4,824
  5,443
  6,100
  6,792
  7,521
  8,284
  9,082
  9,915
  10,783
  11,686
  12,625
  13,602
  14,617
  15,672
  16,768
  17,908
  19,092
Variable operating expenses, $m
  113
  153
  202
  262
  334
  418
  514
  624
  747
  883
  1,030
  1,192
  1,367
  1,555
  1,754
  1,966
  2,189
  2,424
  2,670
  2,927
  3,195
  3,475
  3,766
  4,069
  4,384
  4,711
  5,051
  5,404
  5,771
  6,153
Fixed operating expenses, $m
  246
  252
  257
  263
  269
  275
  281
  287
  293
  300
  306
  313
  320
  327
  334
  341
  349
  357
  364
  372
  381
  389
  398
  406
  415
  424
  434
  443
  453
  463
Total operating expenses, $m
  359
  405
  459
  525
  603
  693
  795
  911
  1,040
  1,183
  1,336
  1,505
  1,687
  1,882
  2,088
  2,307
  2,538
  2,781
  3,034
  3,299
  3,576
  3,864
  4,164
  4,475
  4,799
  5,135
  5,485
  5,847
  6,224
  6,616
Operating income, $m
  -16
  63
  161
  282
  426
  596
  793
  1,018
  1,269
  1,549
  1,859
  2,194
  2,555
  2,942
  3,355
  3,793
  4,254
  4,740
  5,250
  5,783
  6,339
  6,918
  7,522
  8,150
  8,803
  9,482
  10,187
  10,921
  11,683
  12,476
EBITDA, $m
  5
  90
  196
  326
  482
  666
  879
  1,121
  1,393
  1,694
  2,026
  2,387
  2,776
  3,194
  3,639
  4,111
  4,609
  5,133
  5,682
  6,257
  6,857
  7,482
  8,133
  8,810
  9,514
  10,246
  11,006
  11,797
  12,619
  13,474
Interest expense (income), $m
  0
  11
  26
  45
  69
  98
  132
  172
  219
  272
  331
  396
  468
  546
  631
  721
  817
  919
  1,027
  1,140
  1,258
  1,382
  1,511
  1,646
  1,786
  1,932
  2,083
  2,241
  2,405
  2,575
  2,752
Earnings before tax, $m
  -26
  37
  116
  213
  329
  464
  621
  799
  998
  1,218
  1,463
  1,725
  2,008
  2,311
  2,634
  2,975
  3,335
  3,714
  4,110
  4,524
  4,957
  5,407
  5,876
  6,364
  6,871
  7,398
  7,946
  8,516
  9,108
  9,724
Tax expense, $m
  0
  10
  31
  57
  89
  125
  168
  216
  269
  329
  395
  466
  542
  624
  711
  803
  901
  1,003
  1,110
  1,222
  1,338
  1,460
  1,587
  1,718
  1,855
  1,998
  2,146
  2,299
  2,459
  2,626
Net income, $m
  -26
  27
  85
  155
  240
  339
  453
  583
  728
  889
  1,068
  1,260
  1,466
  1,687
  1,923
  2,172
  2,435
  2,711
  3,000
  3,303
  3,618
  3,947
  4,290
  4,646
  5,016
  5,401
  5,801
  6,217
  6,649
  7,099

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
  437
  593
  788
  1,024
  1,306
  1,636
  2,015
  2,447
  2,931
  3,466
  4,054
  4,693
  5,383
  6,121
  6,908
  7,741
  8,620
  9,544
  10,512
  11,525
  12,582
  13,683
  14,830
  16,022
  17,262
  18,550
  19,888
  21,279
  22,725
  24,229
Adjusted assets (=assets-cash), $m
  437
  593
  788
  1,024
  1,306
  1,636
  2,015
  2,447
  2,931
  3,466
  4,054
  4,693
  5,383
  6,121
  6,908
  7,741
  8,620
  9,544
  10,512
  11,525
  12,582
  13,683
  14,830
  16,022
  17,262
  18,550
  19,888
  21,279
  22,725
  24,229
Revenue / Adjusted assets
  0.787
  0.788
  0.788
  0.788
  0.788
  0.788
  0.788
  0.788
  0.788
  0.788
  0.788
  0.788
  0.788
  0.788
  0.788
  0.788
  0.788
  0.788
  0.788
  0.788
  0.788
  0.788
  0.788
  0.788
  0.788
  0.788
  0.788
  0.788
  0.788
  0.788
Average production assets, $m
  104
  142
  188
  245
  312
  391
  481
  584
  700
  828
  968
  1,121
  1,285
  1,462
  1,649
  1,848
  2,058
  2,279
  2,510
  2,752
  3,004
  3,267
  3,541
  3,825
  4,121
  4,429
  4,749
  5,081
  5,426
  5,785
Working capital, $m
  25
  34
  45
  58
  74
  93
  114
  139
  166
  197
  230
  266
  305
  347
  392
  439
  489
  541
  596
  654
  714
  776
  841
  909
  979
  1,052
  1,128
  1,207
  1,289
  1,375
Total debt, $m
  131
  229
  350
  498
  674
  879
  1,116
  1,386
  1,687
  2,022
  2,389
  2,788
  3,218
  3,678
  4,169
  4,689
  5,238
  5,814
  6,419
  7,051
  7,710
  8,397
  9,113
  9,857
  10,630
  11,434
  12,269
  13,137
  14,039
  14,978
Total liabilities, $m
  272
  370
  492
  639
  815
  1,021
  1,258
  1,527
  1,829
  2,163
  2,530
  2,929
  3,359
  3,820
  4,310
  4,830
  5,379
  5,955
  6,560
  7,192
  7,851
  8,538
  9,254
  9,998
  10,771
  11,575
  12,410
  13,278
  14,181
  15,119
Total equity, $m
  164
  223
  296
  385
  491
  615
  758
  920
  1,102
  1,303
  1,524
  1,765
  2,024
  2,302
  2,597
  2,911
  3,241
  3,589
  3,953
  4,333
  4,731
  5,145
  5,576
  6,024
  6,490
  6,975
  7,478
  8,001
  8,545
  9,110
Total liabilities and equity, $m
  436
  593
  788
  1,024
  1,306
  1,636
  2,016
  2,447
  2,931
  3,466
  4,054
  4,694
  5,383
  6,122
  6,907
  7,741
  8,620
  9,544
  10,513
  11,525
  12,582
  13,683
  14,830
  16,022
  17,261
  18,550
  19,888
  21,279
  22,726
  24,229
Debt-to-equity ratio
  0.800
  1.030
  1.180
  1.290
  1.370
  1.430
  1.470
  1.510
  1.530
  1.550
  1.570
  1.580
  1.590
  1.600
  1.610
  1.610
  1.620
  1.620
  1.620
  1.630
  1.630
  1.630
  1.630
  1.640
  1.640
  1.640
  1.640
  1.640
  1.640
  1.640
Adjusted equity ratio
  0.376
  0.376
  0.376
  0.376
  0.376
  0.376
  0.376
  0.376
  0.376
  0.376
  0.376
  0.376
  0.376
  0.376
  0.376
  0.376
  0.376
  0.376
  0.376
  0.376
  0.376
  0.376
  0.376
  0.376
  0.376
  0.376
  0.376
  0.376
  0.376
  0.376

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  -26
  27
  85
  155
  240
  339
  453
  583
  728
  889
  1,068
  1,260
  1,466
  1,687
  1,923
  2,172
  2,435
  2,711
  3,000
  3,303
  3,618
  3,947
  4,290
  4,646
  5,016
  5,401
  5,801
  6,217
  6,649
  7,099
Depreciation, amort., depletion, $m
  20
  27
  35
  45
  56
  70
  85
  103
  123
  145
  167
  193
  222
  252
  284
  319
  355
  393
  433
  474
  518
  563
  610
  660
  711
  764
  819
  876
  936
  997
Funds from operations, $m
  -6
  54
  120
  200
  296
  409
  539
  686
  851
  1,035
  1,235
  1,453
  1,688
  1,939
  2,207
  2,491
  2,790
  3,104
  3,433
  3,777
  4,136
  4,511
  4,900
  5,305
  5,727
  6,164
  6,620
  7,093
  7,585
  8,096
Change in working capital, $m
  7
  9
  11
  13
  16
  19
  22
  24
  27
  30
  33
  36
  39
  42
  45
  47
  50
  52
  55
  57
  60
  62
  65
  68
  70
  73
  76
  79
  82
  85
Cash from operations, $m
  -13
  45
  109
  187
  280
  390
  517
  662
  824
  1,004
  1,201
  1,416
  1,649
  1,897
  2,163
  2,443
  2,740
  3,051
  3,378
  3,720
  4,076
  4,448
  4,835
  5,238
  5,656
  6,091
  6,544
  7,014
  7,503
  8,011
Maintenance CAPEX, $m
  -13
  -18
  -24
  -32
  -42
  -54
  -67
  -83
  -101
  -121
  -143
  -167
  -193
  -222
  -252
  -284
  -319
  -355
  -393
  -433
  -474
  -518
  -563
  -610
  -660
  -711
  -764
  -819
  -876
  -936
New CAPEX, $m
  -30
  -37
  -46
  -56
  -67
  -79
  -91
  -103
  -115
  -128
  -140
  -153
  -165
  -176
  -188
  -199
  -210
  -221
  -231
  -242
  -252
  -263
  -274
  -285
  -296
  -308
  -320
  -332
  -345
  -359
Cash from investing activities, $m
  -43
  -55
  -70
  -88
  -109
  -133
  -158
  -186
  -216
  -249
  -283
  -320
  -358
  -398
  -440
  -483
  -529
  -576
  -624
  -675
  -726
  -781
  -837
  -895
  -956
  -1,019
  -1,084
  -1,151
  -1,221
  -1,295
Free cash flow, $m
  -55
  -10
  38
  98
  171
  258
  359
  476
  608
  756
  918
  1,097
  1,291
  1,500
  1,723
  1,960
  2,211
  2,476
  2,754
  3,045
  3,350
  3,667
  3,998
  4,343
  4,701
  5,073
  5,460
  5,863
  6,281
  6,716
Issuance/(repayment) of debt, $m
  77
  98
  121
  147
  176
  206
  237
  269
  302
  334
  367
  399
  430
  461
  491
  520
  549
  577
  604
  632
  659
  687
  715
  744
  773
  804
  835
  868
  902
  938
Issuance/(repurchase) of shares, $m
  72
  32
  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  
  149
  130
  121
  147
  176
  206
  237
  269
  302
  334
  367
  399
  430
  461
  491
  520
  549
  577
  604
  632
  659
  687
  715
  744
  773
  804
  835
  868
  902
  938
Total cash flow (excl. dividends), $m
  94
  119
  159
  245
  346
  463
  596
  745
  910
  1,090
  1,285
  1,496
  1,721
  1,960
  2,213
  2,480
  2,760
  3,053
  3,358
  3,677
  4,009
  4,354
  4,713
  5,087
  5,474
  5,877
  6,296
  6,731
  7,184
  7,655
Retained Cash Flow (-), $m
  -72
  -59
  -73
  -89
  -106
  -124
  -143
  -162
  -182
  -202
  -221
  -240
  -259
  -278
  -296
  -313
  -331
  -347
  -364
  -381
  -397
  -414
  -431
  -448
  -466
  -484
  -503
  -523
  -544
  -565
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
  22
  60
  86
  156
  241
  339
  453
  583
  728
  889
  1,064
  1,255
  1,462
  1,683
  1,918
  2,167
  2,429
  2,705
  2,994
  3,296
  3,612
  3,940
  4,282
  4,638
  5,008
  5,393
  5,792
  6,208
  6,640
  7,089
Discount rate, %
  4.30
  4.52
  4.74
  4.98
  5.23
  5.49
  5.76
  6.05
  6.35
  6.67
  7.00
  7.35
  7.72
  8.11
  8.51
  8.94
  9.39
  9.86
  10.35
  10.87
  11.41
  11.98
  12.58
  13.21
  13.87
  14.56
  15.29
  16.05
  16.86
  17.70
PV of cash for distribution, $m
  21
  55
  75
  129
  186
  246
  306
  364
  418
  466
  505
  536
  556
  565
  563
  551
  529
  498
  461
  419
  374
  327
  281
  236
  195
  157
  124
  96
  72
  53
Current shareholders' claim on cash, %
  73.3
  65.7
  65.7
  65.7
  65.7
  65.7
  65.7
  65.7
  65.7
  65.7
  65.7
  65.7
  65.7
  65.7
  65.7
  65.7
  65.7
  65.7
  65.7
  65.7
  65.7
  65.7
  65.7
  65.7
  65.7
  65.7
  65.7
  65.7
  65.7
  65.7

Westport Fuel Systems Inc, formerly Westport Innovations Inc, is a Canada-based provider of low-emission engine and fuel system technologies utilizing gaseous fuels. It operates through the Westport Operations segment. The Westport Operations segment designs, manufactures and sells compressed natural gas, liquefied natural gas, and liquefied petroleum gas components and systems to original equipment manufacturers and to aftermarket customers. Its subsidiaries design and manufacture a range of components, including pressure regulators, injectors, electronic control units, valves and filters; sell mono-fuel, bi-fuel and dual-fuel diesel blend conversion kits, and also offer full engine management systems and solutions. The Westport Operations segment has a customer base in Europe and North America, as well as in Asia, South America, and Africa.

FINANCIAL RATIOS  of  Westport Fuel Systems Inc (WPRT)

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%

WPRT stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the WPRT stock intrinsic value calculation we used $247 million for the last fiscal year's total revenue generated by Westport Fuel Systems Inc. The default revenue input number comes from 0001 income statement of Westport Fuel Systems 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 WPRT stock valuation model: a) initial revenue growth rate of 39.3% 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 4.3%, whose default value for WPRT is calculated based on our internal credit rating of Westport Fuel Systems 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 Westport Fuel Systems 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 WPRT stock the variable cost ratio is equal to 33.2%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $241 million in the base year in the intrinsic value calculation for WPRT 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 19.6% for Westport Fuel Systems Inc.

Corporate tax rate of 27% is the nominal tax rate for Westport Fuel Systems 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 WPRT 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 WPRT are equal to 30.3%.

Life of production assets of 5.8 years is the average useful life of capital assets used in Westport Fuel Systems 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 WPRT is equal to 7.2%. 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 - $118.032 million for Westport Fuel Systems 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 132.940 million for Westport Fuel Systems 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 Westport Fuel Systems Inc at the current share price and the inputted number of shares is $0.2 billion.

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