Cabot Microelectronics (CCMP:NAS) Fundamental Valuation Report

Fundamental Valuation Report

Cabot Microelectronics(CCMP:NAS)


This Report was generated using the valuation tools available on For a free 30 day trial click here.

Close Price/Date
$101.65 (USD) 14/11/2018

Weighted Valuation
$105.62 (USD)

Overall Rating
Fairly valued to slightly Undervalued by 3.9%

Valuation Models Analyst Consensus: $130.00 (USD)
(in order of importance) Adjusted Book Value: $78.93 (USD)
Multiples: $85.84 (USD)
Valuation Methods This company is:
Cash Flow: Undervalued on a Cash Flow Valuation
Comparable Company: Overvalued on a Comparable Valuation
Asset: Overvalued on an Asset Valuation

Company Overview (CCMP:NAS USD)

Price 101.65
Range 100.18 – 103.99
52 week 89.39 – 123.06
Open 103.18
Vol / Avg. 804585/231537
Mkt cap 2.59B
P/E 24.26
Div/yield 1.40/0.01
EPS 4.19
Shares 25.51M
Beta 1.29

Company Description

Cabot Microelectronics Corp is a supplier of polishing slurries and polishing pads used in the manufacturing of advanced integrated circuit devices within the semiconductor industry. The company’s products assist in the production of advanced IC devices, by helping customers produce smaller, faster, and more complex IC devices with fewer defects. Cabot’s products are predominately geared towards the process of flattening layers of materials that are deposited upon silicon wafers in the production of ICs. Slightly less than half of the company’s revenue is derived from foundry customers that provide contract manufacturing services for producers of logic devices.

Valuation Details

 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 CCMP:NAS

Using a discounted cash flow model we generated an intrinsic value of $151.27 (USD) for CCMP:NAS

Sensitivity Analysis

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

CCMP:NAS Current Values Valuation If Dropped * Valuation If Raised *
Calculated Value: $151.27 1% 5% 1% 5%
WACC (or Ke) 9.61 $179.80 $130.24
Terminal Growth Rate 3.00 $132.67 $176.49
Tax Rate 0.32 $163.15 $139.39
Cash Flow 455,881,901 $142.98 $159.56
Capital Expenditures -16,975,800 $150.97 $151.57
Long Term Debt 157,500,000 $151.58 $150.96

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

Comparables Model

Using similar companies and price based ratios we generated a valuation of $66.91 (USD) for CCMP:NAS. We also generated a valuation of $80.07 (USD) using other metrics and comparables.
The comparable companies were Diodes (DIOD:NAS), Inphi (IPHI:NYS), MaxLinear (MXL:NYS), ON Semiconductor (ON:NAS) and Power Integrations (POWI:NAS).

Company CCMP:NAS End Date Value
Earnings/Share $4.19 (USD)
Book Value/Share $24.86 (USD)
Sales/Share $21.85 (USD)
Cash Flow/Share $5.95 (USD)
EBITDA/Share $7.26 (USD)
Price Based on Comps Adjustment Factor (%)
$168.63 (USD) -47.8
$70.48 (USD) -14.4
$62.82 (USD) -20.8
$76.63 (USD) -15.7
$105.26 (USD) -31.8
28.88 PE Ratio 40.25 56.96 0.00 0.00 7.46 56.32
3.93 PB Ratio 2.83 1.72 3.68 3.41 2.25 3.11
4.47 PS Ratio 2.87 1.32 4.57 3.21 1.30 3.97
16.40 PCF Ratio 12.88 7.30 18.61 13.16 6.93 18.40
12.17 EV to EBITDA 14.50 11.54 0.00 23.52 6.80 16.15


Using a multiples approach we generated a valuation of  $85.84 (USD) for CCMP:NAS

Company CCMP:NAS End Date Value
Earnings/Share $4.19 (USD)
Book Value/Share $24.86 (USD)
Sales/Share $21.85 (USD)
Cash Flow/Share $5.95 (USD)
EBITDA/Share $7.26 (USD)
Price Based on Comps Adjustment Factor
$101.00 (USD) 0
$76.75 (USD) 0
$69.93 (USD) 0
$91.49 (USD) 0
$90.06 (USD) 0
Ratios Ratio Average
PE Ratio 24.10
PB Ratio 3.09
PS Ratio 3.20
PCF Ratio 15.37
EV to EBITDA 12.41

Adjusted Book Value versus Historical Price to Book

The average the Price to Book ratio for  CCMP:NAS for the last 10 years was  3.02

We ran the Adjusted Book Value for  CCMP:NAS and generated a book value of  $26.14 (USD)
By multiplying these we get an adjusted valuation of  $78.93 (USD)

Analyst Data

In the Stockcalc database there are 1 analysts that provide a valuation for CCMP:NAS. The 1 analysts have a concensus valuation for CCMP:NAS for 2019 of $130.00 (USD).

CCMP:NAS Cabot Microelectronics

Analyst Recommendation
Buy Hold Sell Rating
(of 5)
Guidance As Of
1 1 0 4.0000 Outperform 2018-11-13

Current Price: 101.65 USD

Analyst Consensus
USD Millions 2019 2020
Mean EPS 6.90 8.13
# EPS Analysts 1 1
Mean Revenue 1,084.80 1,215.90
# Revenue Analysts 1 1
Mean Target Price 130.00
Mean Cash Flow 7.45 9.29
Mean EBITDA 349.50 399.80
Mean Net Income 200.80 234.50
Mean Debt Outstanding
Mean Tax Rate 23.50 23.50
Mean Growth Rate
Mean Capital Expenditure 44.00 48.00

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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