DCF Tool

ALG

Alamo Group Inc. – Heavy Duty Truck Manufacturing
Alamo Group is a leader in the design, manufacture, distribution and service of high quality equipment for infrastructure maintenance, agriculture and other applications. Its products include truck and tractor mounted mowing and other vegetation maintenance equipment, street sweepers, snow removal equipment, excavators, vacuum trucks, other industrial equipment, agricultural implements, forestry equipment and related after-market parts and services. The Company, founded in 1969, has approximately 3,950 employees and operates 27 plants in North America, Europe, Australia and Brazil as of September 30, 2020. The corporate offices of Alamo Group Inc. are located in Seguin, Texas.
Analysis Results
Intrinsic Value $703.44
Latest Price $136.58
Relative Value 81% undervalued
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Cash Flow (Millions)
Analysis Parameters
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Analysis Details
Growth Rate Projection

An exponential growth model was fit to the past cash flow data, giving more weight to more recent years. This model determined a growth rate estimate of 21.3%.

Weighted Average Cost of Capital (WACC)

The calculated WACC is 6.8%. This value is used as the default discount rate.

Value of Future Flows

Assuming a growth rate of 21.3%, the cash flows for the next 5 years are projected.

The present value of each year's flow is adjusted to present value using the discount rate.

Year Future flow (million) Present value (million)
2022 226 211
2023 274 240
2024 332 273
2025 403 310
2026 488 352
Terminal Value

Assuming a growth rate after the projection years of 2.0%, the terminal value of the company would be 10400 million. This corresponds to a present value of 7030 million.

Intrinsic Value Per Share

The total present value of the projected cash flows is 1390 million. Adding in the terminal value gives a total present value of 8420 million.

There are presently 12.0 million outstanding shares, so the intrinsic value per share is 703.44.

Financial Statements

The following data was to determine the past cash flows.

Current Assets 612,168,000
Current Cash 42,115,000
Current Liabilities 192,564,000
Current Debt 15,032,000
Non-Cash Working Capital (NCWC) 392,521,000
Change in NCWC 81,935,000
EBIT 116,938,000
Tax Provision 29,253,000
Depreciation and Amortization 44,479,000
Capital Expenditure -25,263,000
Unlevered Free Cash Flow 186,848,362
Current Assets 503,010,000
Current Cash 50,195,000
Current Liabilities 157,295,000
Current Debt 15,066,000
Non-Cash Working Capital (NCWC) 310,586,000
Change in NCWC -73,897,000
EBIT 93,165,000
Tax Provision 21,507,000
Depreciation and Amortization 43,840,000
Capital Expenditure -17,874,000
Unlevered Free Cash Flow 19,590,583
Current Assets 570,828,000
Current Cash 42,311,000
Current Liabilities 162,874,000
Current Debt 18,840,000
Non-Cash Working Capital (NCWC) 384,483,000
Change in NCWC 66,416,000
EBIT 94,648,000
Tax Provision 21,429,000
Depreciation and Amortization 29,965,000
Capital Expenditure -31,337,000
Unlevered Free Cash Flow 135,642,530
Current Assets 452,843,000
Current Cash 34,043,000
Current Liabilities 100,852,000
Current Debt 119,000
Non-Cash Working Capital (NCWC) 318,067,000
Change in NCWC 52,194,000
EBIT 101,088,000
Tax Provision 21,045,000
Depreciation and Amortization 23,114,000
Capital Expenditure -26,587,000
Unlevered Free Cash Flow 127,304,245
Current Assets 392,527,000
Current Cash 25,373,000
Current Liabilities 101,363,000
Current Debt 82,000
Non-Cash Working Capital (NCWC) 265,873,000
Change in NCWC 33,675,000
EBIT 88,738,000
Tax Provision 38,052,000
Depreciation and Amortization 20,464,000
Capital Expenditure -13,490,000
Unlevered Free Cash Flow 88,391,718
Current Assets 327,618,000
Current Cash 16,793,000
Current Liabilities 78,700,000
Current Debt 73,000
Non-Cash Working Capital (NCWC) 232,198,000
Change in NCWC -18,819,000
EBIT 67,620,000
Tax Provision 22,144,000
Depreciation and Amortization 20,800,000
Capital Expenditure -9,711,000
Unlevered Free Cash Flow 35,812,152
Current Assets 362,886,000
Current Cash 26,922,000
Current Liabilities 85,024,000
Current Debt 77,000
Non-Cash Working Capital (NCWC) 251,017,000
Change in NCWC -13,936,000
EBIT 66,528,000
Tax Provision 23,658,000
Depreciation and Amortization 22,101,000
Capital Expenditure -15,479,000
Unlevered Free Cash Flow 35,675,940
Current Assets 393,302,000
Current Cash 39,533,000
Current Liabilities 89,367,000
Current Debt 551,000
Non-Cash Working Capital (NCWC) 264,953,000
Change in NCWC 72,161,000
EBIT 62,664,000
Tax Provision 19,454,000
Depreciation and Amortization 12,650,000
Capital Expenditure -9,806,000
Unlevered Free Cash Flow 117,554,067
Current Assets 336,953,000
Current Cash 63,960,000
Current Liabilities 80,621,000
Current Debt 420,000
Non-Cash Working Capital (NCWC) 192,792,000
Change in NCWC 11,823,000
EBIT 50,737,000
Tax Provision 15,294,000
Depreciation and Amortization 8,898,000
Capital Expenditure -13,639,000
Unlevered Free Cash Flow 42,718,749
Current Assets 306,800,000
Current Cash 48,291,000
Current Liabilities 78,128,000
Current Debt 588,000
Non-Cash Working Capital (NCWC) 180,969,000
Change in NCWC -10,363,000
EBIT 46,005,000
Tax Provision 14,543,000
Depreciation and Amortization 9,948,000
Capital Expenditure -4,654,000
Unlevered Free Cash Flow 25,536,407

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