AeroVironment (AVAV:NAS) Fundamental Valuation Report


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AeroVironment $59.23 (USD) Close Price as of 21/06/2018

Based on the analysis conducted in this report, AeroVironment, (AVAV:NAS) is found to be  Overvalued.

Company AeroVironment
Symbol:Exchange AVAV:NAS
Industry Industrials:Aerospace & Defense
Close Price/Date $59.23 (USD) 21/06/2018
Weighted Average Valuation $41.99 (USD)
Summary AVAV:NAS is found to be  Overvalued by 29.1% using the 3 valuation models shown below.
Valuation Models Used Analyst Consensus: $50.00 (USD)
(in order of importance) Comparables: $35.21 (USD)
Adjusted Book Value: $31.49 (USD)
Valuation Methods Analysis This company is:
Cash Flow Basis: Overvalued on a Cash Flow Valuation basis
Comparable Company Basis: Overvalued on a Comparable Valuation basis
Asset Basis: Overvalued on an Asset Valuation basis

Valuation Details

AeroVironment 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 AVAV:NAS

Using a discounted cash flow model we generated an intrinsic value of $13.79 (USD) for AVAV:NAS

Sensitivity Analysis

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

AVAV:NAS Current Values Valuation If Dropped * Valuation If Raised *
Calculated Value: $13.79 1% 5% 1% 5%
WACC (or Ke) 9.83 $16.25 $11.95
Terminal Growth Rate 3.00 $12.12 $16.02
Tax Rate 0.12 $14.91 $12.66
Cash Flow 46,389,971 $12.66 $14.91
Capital Expenditures
Long Term Debt 357,000 $13.79 $13.78

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

Comparables Model

Using similar companies and price based ratios we generated a valuation of $35.21 (USD) for AVAV:NAS. We also generated a valuation of $54.21 (USD) using other metrics and comparables.
The comparable companies were AAR (AIR:NYS), Aerojet Rocketdyne Hldgs (AJRD:NYS), Cubic (CUB:NYS), Esterline Technologies (ESL:NYS) and Moog (MOG.A:NYS).

Company AVAV:NAS End Date Value
Earnings/Share $1.39 (USD)
Book Value/Share $16.33 (USD)
Sales/Share $12.86 (USD)
Cash Flow/Share $1.34 (USD)
EBITDA/Share $0.00 (USD)
Price Based on Comps Adjustment Factor (%)
$42.05 (USD) 65.9
$68.60 (USD) -54.3
$13.61 (USD) 0.0
$43.07 (USD) -39.3
$0.00 (USD) 0.0
AVAV:NAS Ratios Used Average Values AIR:NYS AJRD:NYS CUB:NYS ESL:NYS MOG.A:NYS
42.61 PE Ratio 30.25 23.55 0.00 0.00 37.49 29.71
3.63 PB Ratio 4.20 1.79 13.17 2.66 1.19 2.19
4.61 PS Ratio 1.06 0.86 1.11 1.19 1.06 1.07
44.12 PCF Ratio 32.08 24.75 18.02 86.64 11.29 19.71
28.18 EV to EBITDA 14.76 12.78 11.83 28.56 9.11 11.51

Multiples

Using a multiples approach we generated a valuation of  $45.70 (USD) for AVAV:NAS

Company AVAV:NAS End Date Value
Earnings/Share $1.39 (USD)
Book Value/Share $16.33 (USD)
Sales/Share $12.86 (USD)
Cash Flow/Share $1.34 (USD)
EBITDA/Share $0.82 (USD)
Price Based on Comps Adjustment Factor
$89.94 (USD) 0
$30.72 (USD) 0
$33.56 (USD) 0
$54.22 (USD) 0
$20.05 (USD) 0
Ratios Ratio Average
PE Ratio 64.71
PB Ratio 1.88
PS Ratio 2.61
PCF Ratio 40.38
EV to EBITDA 24.44

Adjusted Book Value versus Historical Price to Book

The average the Price to Book ratio for  AVAV:NAS for the last 10 years was  1.91

We ran the Adjusted Book Value for  AVAV:NAS and generated a book value of  $16.52 (USD)
By multiplying these we get an adjusted valuation of  $31.49 (USD)

Analyst Data

In the Stockcalc database there are 1 analysts that provide a valuation for AVAV:NAS. The 1 analysts have a concensus valuation for AVAV:NAS for 2019 of $50.00 (USD).

AVAV:NAS AeroVironment

Analyst Recommendation
Buy Hold Sell Rating
(of 5)
Guidance As Of
0 1 0 3.0000 Hold 2018-6-20

Current Price: not available

Analyst Consensus
USD Millions 2018 2019
Mean EPS 0.64 1.00
# EPS Analysts 1 1
Mean Revenue 310.40 346.30
# Revenue Analysts 1 1
Mean Target Price 50.00
Mean Cash Flow 1.02 1.63
Mean EBITDA 32.90 41.30
Mean Net Income 15.30 23.90
Mean Debt Outstanding -95.00 -121.00
Mean Tax Rate 28.30 18.00
Mean Growth Rate 22.80
Mean Capital Expenditure 10.00 12.00

Company Overview (AVAV:NAS USD)

Price 59.23
Range 58.82 – 59.84
52 week 30.97 – 61.27
Open 59.78
Vol / Avg. 167497/238539
Mkt cap 1.42B
P/E 42.61
Div/yield 0.00/0.00
EPS 0.54
Shares 23.91M
Beta 0.43

Summary chart

Detailed Company Description

AeroVironment Inc designs, develops, produces, supports and operates technological portfolio of products and services for government agencies. It supplies unmanned aircraft systems, UAS, tactical missile systems and related services.

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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