AeroVironment (AVAV:NAS) Fundamental Valuation Report

Fundamental Valuation Report

AeroVironment(AVAV:NAS)

Industrials:Aerospace & Defense

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

Close Price/Date
$72.95 (USD) 08/01/2019

Weighted Valuation
$75.24 (USD)

Overall Rating
Fairly valued to slightly Undervalued by 3.1%

Valuation Models Analyst Consensus: $84.00 (USD)
(in order of importance) Multiples: $62.09 (USD)
Valuation Methods This company is:
Cash Flow: Overvalued on a Cash Flow Valuation
Comparable Company: Overvalued on a Comparable Valuation
Asset: Overvalued on an Asset Valuation

Company Overview (AVAV:NAS USD)

Price 72.95
Range 70.19 – 73.27
52 week 43.01 – 119.83
Open 70.35
Vol / Avg. 221431/315481
Mkt cap 1.75B
P/E 47.44
Div/yield 0.00/0.00
EPS 0.84
Shares 23.93M
Beta 1.29

Company Description

AeroVironment Inc supplies unmanned aircraft systems, tactical missile systems, and other related services to government agencies (within the United States Department of Defense). The systems can help with security, surveillance, or sensing, and provide "eyes in the sky" without needing an actual person, or driver, in the sky. Additionally, it supplies charging and power-down systems and services for electric vehicles. Commercial, consumer, and government customers help produce sales in the energy space. The company has two operating segments: unmanned aircraft systems and efficient energy systems.

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 AVAV:NAS

Using a discounted cash flow model we generated an intrinsic value of $18.37 (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: $18.37 1% 5% 1% 5%
WACC (or Ke) 10.94 $21.09 $16.25
Terminal Growth Rate 3.00 $16.53 $20.73
Tax Rate 0.30 $19.84 $16.89
Cash Flow 67,169,982 $17.25 $19.48
Capital Expenditures -7,717,800 $18.25 $18.49
Long Term Debt 357,000 $18.37 $18.36

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

Comparables Model

Using similar companies and price based ratios we generated a valuation of $45.10 (USD) for AVAV:NAS. We also generated a valuation of $68.52 (USD) using other metrics and comparables.
The comparable companies were Aerojet Rocketdyne Hldgs (AJRD:NYS), BWX Technologies (BWXT:NYS), Esterline Technologies (ESL:NYS), Hexcel (HXL:NYS) and Moog (MOG.A:NYS).

Company AVAV:NAS End Date Value
Earnings/Share $2.15 (USD)
Book Value/Share $18.56 (USD)
Sales/Share $13.42 (USD)
Cash Flow/Share $1.69 (USD)
EBITDA/Share $1.57 (USD)
Price Based on Comps Adjustment Factor (%)
$70.81 (USD) 65.9
$90.41 (USD) -54.3
$23.48 (USD) 0.0
$41.33 (USD) -39.3
$18.19 (USD) 0.0
AVAV:NAS Ratios Used Average Values AJRD:NYS BWXT:NYS ESL:NYS HXL:NYS MOG.A:NYS
34.85 PE Ratio 32.93 45.75 20.34 52.35 17.32 28.91
3.66 PB Ratio 4.87 6.96 9.62 1.97 3.61 2.20
5.06 PS Ratio 1.75 1.33 2.19 1.77 2.41 1.03
40.18 PCF Ratio 24.44 9.33 55.76 16.87 12.96 27.28
23.50 EV to EBITDA 11.60 9.85 11.59 13.39 12.06 11.12

Multiples

Using a multiples approach we generated a valuation of  $62.09 (USD) for AVAV:NAS

Company AVAV:NAS End Date Value
Earnings/Share $2.15 (USD)
Book Value/Share $18.56 (USD)
Sales/Share $13.42 (USD)
Cash Flow/Share $1.69 (USD)
EBITDA/Share $1.57 (USD)
Price Based on Comps Adjustment Factor
$128.96 (USD) 0
$39.03 (USD) 0
$39.09 (USD) 0
$63.72 (USD) 0
$39.63 (USD) 0
Ratios Ratio Average
PE Ratio 59.98
PB Ratio 2.10
PS Ratio 2.91
PCF Ratio 37.68
EV to EBITDA 25.28

Adjusted Book Value versus Historical Price to Book

The average the Price to Book ratio for  AVAV:NAS for the last 10 years was  2.11

We ran the Adjusted Book Value for  AVAV:NAS and generated a book value of  $18.58 (USD)
By multiplying these we get an adjusted valuation of  $39.22 (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 2020 of $84.00 (USD).

AVAV:NAS AeroVironment

Analyst Recommendation
Buy Hold Sell Rating
(of 5)
Guidance As Of
0 1 0 3.0000 Hold 2019-1-7

Current Price: 72.95 USD

Analyst Consensus
USD Millions 2019 2020
Mean EPS 0.73 1.60
# EPS Analysts 1 1
Mean Revenue 310.00 357.00
# Revenue Analysts 1 1
Mean Target Price 84.00
Mean Cash Flow 1.88
Mean EBITDA 53.60 59.80
Mean Net Income 35.80 39.50
Mean Debt Outstanding -212.00
Mean Tax Rate 13.70 16.50
Mean Growth Rate 56.20
Mean Capital Expenditure 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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