Kulicke & Soffa Indus (KLIC:NAS) Fundamental Valuation Report

Fundamental Valuation Report

Kulicke & Soffa Indus(KLIC:NAS)

Technology:Semiconductor Equipment & Materials

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

Close Price/Date
$20.84 (USD) 26/11/2018

Weighted Valuation
$27.00 (USD)

Overall Rating
Undervalued by 29.5%

Valuation Models Analyst Consensus: $31.60 (USD)
(in order of importance) Discounted Cash Flow: $20.17 (USD)
Comparables: $26.84 (USD)
Valuation Methods This company is:
Cash Flow: Fairly valued on a Cash Flow Valuation
Comparable Company: Undervalued on a Comparable Valuation
Asset: Overvalued on an Asset Valuation

Company Overview (KLIC:NAS USD)

Price 20.84
Range 20.11 – 20.84
52 week 19.50 – 28.48
Open 20.61
Vol / Avg. 667266/705240
Mkt cap 1.4B
P/E 26.05
Div/yield 0.24/0.01
EPS 0.80
Shares 67.17M
Beta 1.24

Company Description

Kulicke & Soffa Industries Inc is an United States-based company that is principally engaged in designing, manufacturing, and selling capital equipment and expendable tools that are used for assembling semiconductor devices. The company operates through two core segments: equipment, which produces and sells a series of ball bonders, wafer-level bonders, wedge bonders, advanced packaging and electronic assembly solutions; and expendable tools, which produces and offers various expendable tools designed for multiple semiconductor packaging applications. The equipment segment contributes the majority of total revenue. The company generates the majority of its total revenue from the overseas market, mainly in the Asia-Pacific region.

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 KLIC:NAS

Using a discounted cash flow model we generated an intrinsic value of $20.17 (USD) for KLIC:NAS

Sensitivity Analysis

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

KLIC:NAS Current Values Valuation If Dropped * Valuation If Raised *
Calculated Value: $20.17 1% 5% 1% 5%
WACC (or Ke) 10.10 $23.50 $17.67
Terminal Growth Rate 3.00 $17.99 $23.07
Tax Rate 0.44 $22.07 $18.28
Cash Flow 205,632,414 $19.06 $21.29
Capital Expenditures -13,891,400 $20.10 $20.25
Long Term Debt 0 $20.17 $20.17

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

Comparables Model

Using similar companies and price based ratios we generated a valuation of $26.84 (USD) for KLIC:NAS. We also generated a valuation of $54.08 (USD) using other metrics and comparables.
The comparable companies were Brooks Automation (BRKS:NAS), Entegris (ENTG:NAS) and Universal Display (OLED:NAS).

Company KLIC:NAS End Date Value
Earnings/Share $0.80 (USD)
Book Value/Share $13.14 (USD)
Sales/Share $12.91 (USD)
Cash Flow/Share $2.27 (USD)
EBITDA/Share $2.81 (USD)
Price Based on Comps Adjustment Factor (%)
$37.27 (USD) -65.1
$67.64 (USD) -45.0
$34.14 (USD) -53.1
$65.17 (USD) -56.2
$39.57 (USD) 0.0
KLIC:NAS Ratios Used Average Values BRKS:NAS ENTG:NAS OLED:NAS
27.11 PE Ratio 46.59 17.73 28.85 93.19
1.55 PB Ratio 5.15 3.08 3.46 8.90
1.57 PS Ratio 8.69 2.75 2.54 20.79
8.94 PCF Ratio 28.77 28.41 12.41 45.49
3.83 EV to EBITDA 24.40 17.63 10.57 44.99

Multiples

Using a multiples approach we generated a valuation of  $21.67 (USD) for KLIC:NAS

Company KLIC:NAS End Date Value
Earnings/Share $0.80 (USD)
Book Value/Share $13.14 (USD)
Sales/Share $12.91 (USD)
Cash Flow/Share $2.27 (USD)
EBITDA/Share $2.81 (USD)
Price Based on Comps Adjustment Factor
$15.09 (USD) 0
$19.15 (USD) 0
$23.52 (USD) 0
$32.26 (USD) 0
$18.33 (USD) 0
Ratios Ratio Average
PE Ratio 18.87
PB Ratio 1.46
PS Ratio 1.82
PCF Ratio 14.19
EV to EBITDA 6.53

Adjusted Book Value versus Historical Price to Book

The average the Price to Book ratio for  KLIC:NAS for the last 10 years was  1.48

We ran the Adjusted Book Value for  KLIC:NAS and generated a book value of  $13.11 (USD)
By multiplying these we get an adjusted valuation of  $19.38 (USD)

Analyst Data

In the Stockcalc database there are 2 analysts that provide a valuation for KLIC:NAS. The 2 analysts have a concensus valuation for KLIC:NAS for 2019 of $31.60 (USD).

KLIC:NAS Kulicke & Soffa Indus

Analyst Recommendation
Buy Hold Sell Rating
(of 5)
Guidance As Of
2 1 0 4.3333 Outperform 2018-11-23

Current Price: 20.84 USD

Analyst Consensus
USD Millions 2019 2020
Mean EPS 2.13 2.40
# EPS Analysts 2 1
Mean Revenue 889.20 900.00
# Revenue Analysts 2 1
Mean Target Price 31.60
Mean Cash Flow 2.04
Mean EBITDA
Mean Net Income 137.50 145.40
Mean Debt Outstanding
Mean Tax Rate 15.00 15.00
Mean Growth Rate 12.00
Mean Capital Expenditure 17.80

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.

Notice to User


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