Wesco Aircraft Hldgs (WAIR:NYS) Fundamental Valuation Report

Fundamental Valuation Report

Wesco Aircraft Hldgs(WAIR:NYS)

Industrials:Industrial Distribution

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

Close Price/Date
$9.36 (USD) 28/11/2018

Weighted Valuation
$10.80 (USD)

Overall Rating
Undervalued by 15.4%

Valuation Models Analyst Consensus: $11.00 (USD)
(in order of importance) Adjusted Book Value: $10.31 (USD)
Multiples: $11.18 (USD)
Valuation Methods This company is:
Cash Flow: Overvalued on a Cash Flow Valuation
Comparable Company: Undervalued on a Comparable Valuation
Asset: Undervalued on an Asset Valuation

Company Overview (WAIR:NYS USD)

Price 9.36
Range 9.04 – 9.47
52 week 6.30 – 13.95
Open 9.09
Vol / Avg. 300798/417850
Mkt cap 931.86M
P/E 28.36
Div/yield 0.00/0.00
EPS 0.33
Shares 99.56M
Beta 0.33

Company Description

Wesco Aircraft Holdings Inc is a distributor of supply management services to the aerospace industry. The services include distribution, management of supplier relationships, quality assurance, kitting, just-in-time delivery, and point-of-use inventory management. The company serves commercial aerospace, energy, general aviation, pharmaceuticals, airlines, and maintenance and repair companies, and the defense sector. The majority of its revenue stream is based on long-term contracts. The largest customer by revenue can be categorized as original equipment manufacturers and contractors. Geographically, North America makes up the lion’s share of Wesco Aircraft’s generated sales.

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 WAIR:NYS

Using a discounted cash flow model we generated an intrinsic value of $6.64 (USD) for WAIR:NYS

Sensitivity Analysis

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

WAIR:NYS Current Values Valuation If Dropped * Valuation If Raised *
Calculated Value: $6.64 1% 5% 1% 5%
WACC (or Ke) 5.18 $10.61 $4.00
Terminal Growth Rate 0.20 $4.15 $10.37
Tax Rate 0.27 $8.57 $4.70
Cash Flow 202,804,800 $5.17 $8.11
Capital Expenditures -9,742,400 $6.57 $6.71
Long Term Debt 879,624,000 $7.08 $6.20

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

Comparables Model

Using similar companies and price based ratios we generated a valuation of $12.85 (USD) for WAIR:NYS. We also generated a valuation of $16.88 (USD) using other metrics and comparables.
The comparable companies were Applied Industrial Tech (AIT:NYS), Anixter International (AXE:NYS), SiteOne Landscape Supply (SITE:NYS) and WESCO International (WCC:NYS).

Company WAIR:NYS End Date Value
Earnings/Share $0.33 (USD)
Book Value/Share $6.85 (USD)
Sales/Share $15.35 (USD)
Cash Flow/Share ($0.13) (USD)
EBITDA/Share $1.39 (USD)
Price Based on Comps Adjustment Factor (%)
$0.00 (USD) -26.9
$25.27 (USD) -53.5
$10.89 (USD) 26.8
($8.55) (USD) -27.3
$18.16 (USD) 35.3
WAIR:NYS Ratios Used Average Values AIT:NYS AXE:NYS SITE:NYS WCC:NYS
0.00 PE Ratio 22.02 18.21 19.49 36.98 13.38
1.49 PB Ratio 3.69 3.13 1.41 9.14 1.08
0.66 PS Ratio 0.71 0.84 0.27 1.43 0.30
0.00 PCF Ratio 21.22 17.53 12.68 40.53 14.12
13.55 EV to EBITDA 13.02 12.40 9.22 21.55 8.90

Multiples

Using a multiples approach we generated a valuation of  $11.18 (USD) for WAIR:NYS

Company WAIR:NYS End Date Value
Earnings/Share $0.33 (USD)
Book Value/Share $6.85 (USD)
Sales/Share $15.35 (USD)
Cash Flow/Share ($0.13) (USD)
EBITDA/Share $1.39 (USD)
Price Based on Comps Adjustment Factor
$4.89 (USD) 0
$10.04 (USD) 0
$12.95 (USD) 0
$0.00 (USD) 0
$16.83 (USD) 0
Ratios Ratio Average
PE Ratio 14.82
PB Ratio 1.46
PS Ratio 0.84
PCF Ratio 12.79
EV to EBITDA 12.07

Adjusted Book Value versus Historical Price to Book

The average the Price to Book ratio for  WAIR:NYS for the last 7 years was  1.48

We ran the Adjusted Book Value for  WAIR:NYS and generated a book value of  $6.96 (USD)
By multiplying these we get an adjusted valuation of  $10.31 (USD)

Analyst Data

In the Stockcalc database there are 1 analysts that provide a valuation for WAIR:NYS. The 1 analysts have a concensus valuation for WAIR:NYS for 2019 of $11.00 (USD).

WAIR:NYS Wesco Aircraft Hldgs

Analyst Recommendation
Buy Hold Sell Rating
(of 5)
Guidance As Of
0 1 1 2.0000 Underperform 2018-11-27

Current Price: 9.36 USD

Analyst Consensus
USD Millions 2019 2020 2021
Mean EPS 0.80 0.93 0.97
# EPS Analysts 1 1 1
Mean Revenue 1,641.40 1,699.80 1,760.30
# Revenue Analysts 1 1 1
Mean Target Price 11.00
Mean Cash Flow 1.10 1.24 1.28
Mean EBITDA 171.20 195.50 202.40
Mean Net Income 80.00 93.40 97.90
Mean Debt Outstanding 739.90 663.90
Mean Tax Rate
Mean Growth Rate
Mean Capital Expenditure 9.00 9.00 10.00

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.

Notice to User


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