American Outdoor Brands (AOBC:NAS) Fundamental Valuation Report


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American Outdoor Brands $12.80 (USD) Close Price as of 21/06/2018

Based on the analysis conducted in this report, American Outdoor Brands, (AOBC:NAS) is found to be  Overvalued.

Company American Outdoor Brands
Symbol:Exchange AOBC:NAS
Industry Industrials:Aerospace & Defense
Close Price/Date $12.80 (USD) 21/06/2018
Weighted Average Valuation $11.81 (USD)
Summary AOBC:NAS is found to be  Overvalued by 7.8% using the 2 valuation models shown below.
Valuation Models Used Analyst Consensus: $13.00 (USD)
Comparables: $10.01 (USD)
Valuation Methods Analysis This company is:
Cash Flow Basis: Undervalued on a Cash Flow Valuation basis
Comparable Company Basis: Overvalued on a Comparable Valuation basis
Asset Basis: Undervalued on an Asset Valuation basis

Valuation Details

American Outdoor Brands 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 AOBC:NAS

Using a discounted cash flow model we generated an intrinsic value of $63.03 (USD) for AOBC:NAS

Sensitivity Analysis

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

AOBC:NAS Current Values Valuation If Dropped * Valuation If Raised *
Calculated Value: $63.03 1% 5% 1% 5%
WACC (or Ke) 4.73 $81.21 $51.22
Terminal Growth Rate 0.00 $52.27 $79.57
Tax Rate 0.33 $68.40 $57.66
Cash Flow 309,061,075 $59.04 $67.03
Capital Expenditures
Long Term Debt 171,505,000 $63.19 $62.87

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

Comparables Model

Using similar companies and price based ratios we generated a valuation of $10.01 (USD) for AOBC:NAS. We also generated a valuation of $24.42 (USD) using other metrics and comparables.
The comparable companies were AAR (AIR:NYS), Aerojet Rocketdyne Hldgs (AJRD:NYS), Esterline Technologies (ESL:NYS), National Presto Indus (NPK:NYS) and Sturm Ruger & Co (RGR:NYS).

Company AOBC:NAS End Date Value
Earnings/Share $0.37 (USD)
Book Value/Share $7.76 (USD)
Sales/Share $11.07 (USD)
Cash Flow/Share $1.12 (USD)
EBITDA/Share $0.00 (USD)
Price Based on Comps Adjustment Factor (%)
$9.67 (USD) -59.3
$35.81 (USD) -42.0
$17.32 (USD) -24.7
$18.97 (USD) -87.9
$0.00 (USD) 0.0
AOBC:NAS Ratios Used Average Values AIR:NYS AJRD:NYS ESL:NYS NPK:NYS RGR:NYS
34.59 PE Ratio 26.13 23.55 0.00 37.49 20.51 22.97
1.65 PB Ratio 4.61 1.79 13.17 1.19 2.70 4.22
1.16 PS Ratio 1.57 0.86 1.11 1.06 2.69 2.11
11.39 PCF Ratio 16.87 24.75 18.02 11.29 22.27 8.02
10.32 EV to EBITDA 10.97 12.78 11.83 9.11 11.72 9.44

Multiples

Using a multiples approach we generated a valuation of  $18.20 (USD) for AOBC:NAS

Company AOBC:NAS End Date Value
Earnings/Share $0.37 (USD)
Book Value/Share $7.76 (USD)
Sales/Share $11.07 (USD)
Cash Flow/Share $1.12 (USD)
EBITDA/Share $4.56 (USD)
Price Based on Comps Adjustment Factor
$4.82 (USD) 0
$30.32 (USD) 0
$16.37 (USD) 0
$9.39 (USD) 0
$30.08 (USD) 0
Ratios Ratio Average
PE Ratio 13.03
PB Ratio 3.91
PS Ratio 1.48
PCF Ratio 8.36
EV to EBITDA 6.59

Adjusted Book Value versus Historical Price to Book

The average the Price to Book ratio for  AOBC:NAS for the last 10 years was  3.87

We ran the Adjusted Book Value for  AOBC:NAS and generated a book value of  $7.63 (USD)
By multiplying these we get an adjusted valuation of  $29.51 (USD)

Analyst Data

In the Stockcalc database there are 1 analysts that provide a valuation for AOBC:NAS. The 1 analysts have a concensus valuation for AOBC:NAS for 2019 of $13.00 (USD).

Company Overview (AOBC:NAS USD)

Price 12.80
Range 11.61 – 12.98
52 week 9.00 – 23.94
Open 12.25
Vol / Avg. 5.64M/876818
Mkt cap 692.86M
P/E 34.59
Div/yield 0.00/0.00
EPS 0.37
Shares 54.13M
Beta 0.87

Summary chart

Detailed Company Description

American Outdoor Brands Corp manufactures firearms. It manufactures handguns, modern sporting rifles, hunting rifles, black powder firearms, handcuffs, and firearm-related products and accessories.

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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