Advanced Disposal Servs (ADSW:NYS) Fundamental Valuation Report


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Advanced Disposal Servs $21.62 (USD) Close Price as of 01/03/2018

Based on the analysis conducted in this report, Advanced Disposal Servs, (ADSW:NYS) is found to be  Undervalued.

Company Advanced Disposal Servs
Symbol:Exchange ADSW:NYS
Industry Industrials:Waste Management
Close Price/Date $21.62 (USD) 01/03/2018
Weighted Average Valuation $26.55 (USD)
Summary ADSW:NYS is found to be  Undervalued by 22.8% using the 3 valuation models shown below.
Valuation Models Used Analyst Consensus: $26.80 (USD)
(in order of importance) Comparables: $27.38 (USD)
Adjusted Book Value: $24.14 (USD)
Valuation Methods Analysis This company is:
Cash Flow Basis: Overvalued on a Cash Flow Valuation basis
Comparable Company Basis: Undervalued on a Comparable Valuation basis
Asset Basis: Undervalued on an Asset Valuation basis

Valuation Details

Advanced Disposal Servs Valuations

Summary chart

 We have up to 6 valuation points for each company. Details are at the bottom of the report.

Discounted Cash Flow and Sensitivity Analysis for ADSW:NYS

Using a discounted cash flow model we generated an intrinsic value of $5.89 (USD) for ADSW:NYS

Sensitivity Analysis

(showing how changes in the input variables impact the DCF calculation)

ADSW:NYS Current Values Valuation If Dropped * Valuation If Raised *
Calculated Value: $5.89 1% 5% 1% 5%
WACC (or Ke) 6.59 $14.34 $0.29
Terminal Growth Rate 1.60 $0.88 $13.41
Tax Rate 0.40 $9.51 $2.28
Cash Flow 455,269,600 $2.96 $8.82
Capital Expenditures -155,560,000 $4.87 $6.91
Long Term Debt 2,237,900,000 $7.16 $4.63

* Changes are absolute: ex WACC from 8% to 7%

Comparables Model

Using similar companies and price based ratios we generated a valuation of $26.95 (USD) for ADSW:NYS. We also generated a valuation of $27.38 (USD) using other metrics and comparables.
The comparable companies were Clean Harbors (CLH:NYS), Covanta Holding (CVA:NYS), Darling Ingredients (DAR:NYS) and Stericycle (SRCL:NAS)

Company ADSW:NYS End Date Value
Cash/Share $0.00 (USD)
Book Value/Share $10.00 (USD)
MarketCap 1,913,179,614
1 Year Return -0.039
NetPPE 0
Price Based on Comps Adjustment Factor (%)
$0.00 (USD) 0
$21.13 (USD) 0
$39.87 (USD) 0
$21.15 (USD) 0
$0.00 (USD) 0
Ratios Used Average Values CLH:NYS CVA:NYS DAR:NYS SRCL:NAS
Cash / Share 0.37 0.00 0.35 0.64 0.49
Book Value / Share 16.88 19.22 2.87 12.44 32.98
Market Cap 3,551,669,136 3,146,084,455 1,961,720,235 2,739,122,166 6,359,749,687
1 Year Return -0.06 -0.16 -0.08 0.24 -0.24
Net PPE 1,664,274,000 0 2,606,000,000 1,645,822,000 741,000,000

Multiples

Using a multiples approach we generated a valuation of  $27.93 (USD) for ADSW:NYS

Company ADSW:NYS End Date Value
Earnings/Share $0.43 (USD)
Book Value/Share $10.00 (USD)
Sales/Share $16.96 (USD)
Cash Flow/Share $3.47 (USD)
EBITDA/Share $3.41 (USD)
Price Based on Comps Adjustment Factor
$22.00 (USD) 0
$25.29 (USD) 0
$23.38 (USD) 0
$24.84 (USD) 0
$44.15 (USD) 0
Ratios Ratio Average
PE Ratio 51.16
PB Ratio 2.53
PS Ratio 1.38
PCF Ratio 7.15
EV to EBITDA 12.93

Adjusted Book Value versus Historical Price to Book

The average the Price to Book ratio for  ADSW:NYS for the last 2 years was  2.53

We ran the Adjusted Book Value for  ADSW:NYS and generated a book value of  $9.55 (USD)
By multiplying these we get an adjusted valuation of  $24.14 (USD)

Analyst Data

In the Stockcalc database there are 5 analysts that provide a valuation for ADSW:NYS. The 5 analysts have a concensus valuation for ADSW:NYS for 2018 of $26.80 (USD).

ADSW:NYS Advanced Disposal Servs

Analyst Recommendation
Buy Hold Sell Rating
(of 5)
Guidance As Of
5 0 0 5.0000 Buy 2018-2-28

Current Price: not available

Analyst Consensus
USD Millions 2017 2018 2019
Mean EPS 0.40 0.55 0.72
# EPS Analysts 5 5 4
Mean Revenue 1,505.90 1,560.70 1,620.10
# Revenue Analysts 5 5 4
Mean Target Price 26.80
Mean Cash Flow 3.37 3.62 3.85
Mean EBITDA 388.30 420.60 448.10
Mean Net Income 30.00 45.40 62.30
Mean Debt Outstanding -8.80 -4.10 -11.80
Mean Tax Rate 734.15 27.00 27.00
Mean Growth Rate 10.00
Mean Capital Expenditure 183.90 187.20 191.40

Company Overview (ADSW:NYS USD)

Price 0.00
Range 0.00 – 0.00
52 week 0.00 – 0.00
Open 0.00
Vol / Avg. 0/0
Mkt cap 0
P/E 0.00
Div/yield 0.00/0.00
EPS 0.00
Shares 0
Beta 0.00
Summary chart

Detailed Company Description

Advanced Disposal Services Inc provides ideas and solutions to the business of a clean environment. It offers non-hazardous solid waste collection, transfer, recycling and disposal services to the commercial, industrial and residential customers.

Explanation of Valuation Models

We have up to 6 valuation points for each company in the database.
The Discounted Cash Flow (DCF) valuation is a cash flow model where cash flow projections are discounted back to the present to calculate value per share. DCF is a common valuation technique especially for companies undergoing irregular cash flows such as resource companies (mining, forestry, oil and gas) going though price cycles or smaller companies about to generate cash flow (junior exploration companies, junior pharma, technology firms…).
The Price Comparables valuation is the result of valuing the company we are looking at on the basis of ratios from selected comparable companies: Price to Earnings, Price to Book, Price to Sales, Price to Cash Flow, Enterprise Value (EV) to EBITDA. Each of these ratios for the selected comparable companies are averaged and multiplied by the values for the company we are interested in to calculate a value per share for our selected company.
We have included the Other Comparables as a way to value companies that cannot be valued using Earnings based ratios. This technique is very useful for companies still experiencing negative cash flows such as mining exploration firms. We use Cash/Share, Book Value/Share, MarketCap, 1 Year Return, NetPPE as the ratios here. Each of these ratios for the selected comparable companies are averaged and multiplied by the values for the company we are interested in to calculate a value per share for our selected company.
Multiples are similar to Price comparables where we look at current or historic ratios for the company in question to assess what it should be worth today based on those historic ratios. We use the same 5 ratios as in the price comparables and value the company with its historic averages.
With Adjusted Book Value (ABV) we calculate the book value per share for the company based on its balance sheet and multiply that book value per share by its historical price to book ratio to calculate a value per share.
If we have Analyst coverage for the company we use the consensus target price here.

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