Altra Industrial Motion (AIMC:NAS) Fundamental Valuation Report

Altra Industrial Motion (AIMC:NAS) Fundamental Valuation Report

Fundamental Valuation Report

Altra Industrial Motion(AIMC:NAS)

Industrials:Specialty Industrial Machinery

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

Close Price/Date
$65.45 (USD) 05/27/2021

Weighted Valuation
$71.13 (USD)

Overall Rating
Undervalued by 8.7%

Valuation Models Multiples: $55.67 (USD)
Adjusted Book Value: $87.73 (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
According to Analyst consensus at $70.00 this stock is Undervalued

Company Overview (AIMC:NAS USD)

Price 65.45
Range 64.90 – 66.05
52 week 28.65 – 67.69
Open 65.70
Vol / Avg. 226059/341514
Mkt cap 4.24B
P/E 32.40
Div/yield 0.31/0.00
EPS -0.39
Shares 64.79M
Beta 2.54

Company Description

Altra Industrial Motion Corp is a United States-based company that designs, manufactures, and sells a wide range of mechanical power transmission and motion control products. The company operates through two business segments based on product types and end markets served: the power transmission technologies segment and the automation and specialty segment. The company’s product portfolio consists of products such as clutches, brakes, gears, and motion controllers and braking systems, which are used in heavy industrial applications, energy markets, medical, packaging, automation, robotic, and other industries. The company earns most of its revenue in North America ( primarily the United States).

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 AIMC:NAS

Using a discounted cash flow model we generated an intrinsic value of $40.52 (USD) for AIMC:NAS

Sensitivity Analysis

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

AIMC:NAS Current Values Valuation If Dropped * Valuation If Raised *
Calculated Value: $40.52 1% 5% 1% 5%
WACC (or Ke) 13.06 $45.59 $36.37
Terminal Growth Rate 3.00 $37.06 $44.74
Tax Rate 0.27 $43.54 $37.50
Cash Flow 471,055,244 $38.21 $42.83
Capital Expenditures -34,235,400 $40.37 $40.67
Long Term Debt 210,154,000 $40.68 $40.36

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

Comparables Model

Using similar companies and price based ratios we generated a valuation of $89.50 (USD) for AIMC:NAS. We also generated a valuation of $103.89 (USD) using other metrics and comparables.
The comparable companies were TPI Composites (TPIC:NAS), Welbilt (WBT:NYS), SPX FLOW (FLOW:NYS), CSW Industrials (CSWI:NAS) and John Bean Technologies (JBT:NYS).

Company AIMC:NAS End Date Value
Earnings/Share $2.02 (USD)
Book Value/Share $30.74 (USD)
Sales/Share $27.22 (USD)
Cash Flow/Share $4.07 (USD)
EBITDA/Share $3.14 (USD)
Price Based on Comps Adjustment Factor (%)
$153.19 (USD) -10.8
$208.97 (USD) -33.7
$69.69 (USD) -40.2
$95.09 (USD) -33.3
$84.12 (USD) -15.0
AIMC:NAS Ratios Used Average Values TPIC:NAS WBT:NYS FLOW:NYS CSWI:NAS JBT:NYS
32.40 PE Ratio 75.84 0.00 166.00 47.01 46.58 43.76
2.13 PB Ratio 6.80 9.40 10.18 2.80 4.72 6.88
2.40 PS Ratio 2.56 1.04 2.47 2.04 4.47 2.77
16.08 PCF Ratio 28.92 42.83 39.69 19.35 28.29 14.45
14.88 EV to EBITDA 26.76 34.75 27.49 20.10 29.28 22.19

Multiples

Using a multiples approach we generated a valuation of  $55.67 (USD) for AIMC:NAS

Company AIMC:NAS End Date Value
Earnings/Share $2.02 (USD)
Book Value/Share $30.74 (USD)
Sales/Share $27.22 (USD)
Cash Flow/Share $4.07 (USD)
EBITDA/Share $3.14 (USD)
Price Based on Comps Adjustment Factor
$56.04 (USD) 0
$87.77 (USD) 0
$35.66 (USD) 0
$50.53 (USD) 0
$48.37 (USD) 0
Ratios Ratio Average
PE Ratio 27.74
PB Ratio 2.86
PS Ratio 1.31
PCF Ratio 12.41
EV to EBITDA 15.39

Adjusted Book Value versus Historical Price to Book

The average the Price to Book ratio for  AIMC:NAS for the last 10 years was  2.85

We ran the Adjusted Book Value for  AIMC:NAS and generated a book value of  $30.80 (USD)
By multiplying these we get an adjusted valuation of  $87.73 (USD)

Analyst Data

In the Stockcalc database there are 1 analysts that provide a valuation for AIMC:NAS. The 1 analysts have a concensus valuation for AIMC:NAS for 2021 of $70.00 (USD).

AIMC:NAS Altra Industrial Motion

Analyst Recommendation
Buy Hold Sell Rating
(of 5)
Guidance As Of
1 0 0 5.0000 Buy 2021-5-26

Current Price: 65.45 USD

Analyst Consensus
USD Millions 2021 2022
Mean EPS 3.27 3.75
# EPS Analysts 1 1
Mean Revenue 1,855.00 1,985.00
# Revenue Analysts 1 1
Mean Target Price 70.00
Mean Cash Flow
Mean EBITDA
Mean Net Income 213.00 245.00
Mean Debt Outstanding
Mean Tax Rate 21.30 21.50
Mean Growth Rate 15.00
Mean Capital Expenditure

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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