DCF Tool

ALSN

Allison Transmission Holdings Inc – Heavy Duty Truck Manufacturing
Allison Transmission (NYSE: ALSN) is the world's largest manufacturer of fully automatic transmissions for medium- and heavy-duty commercial vehicles and medium- and heavy-tactical U.S. defense vehicles, as well as a supplier of commercial vehicle propulsion solutions, including electric hybrid and fully electric propulsion systems. Allison products are used in a wide variety of applications, including on-highway trucks (distribution, refuse, construction, fire and emergency), buses (school, transit and coach), motorhomes, off-highway vehicles and equipment (energy, mining and construction applications) and defense vehicles (wheeled and tracked). Founded in 1915, the company is headquartered in Indianapolis, Indiana, USA. With a market presence in more than 80 countries, Allison has regional headquarters in the Netherlands, China and Brazil with manufacturing facilities in the U.S., Hungary and India. Allison also has approximately 1,500 independent distributor and dealer locations worldwide.
Analysis Results
Intrinsic Value $159.11
Latest Price $43.80
Relative Value 72% 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 2.3%.

Weighted Average Cost of Capital (WACC)

The calculated WACC is 5.7%. This value is used as the default discount rate.

Value of Future Flows

Assuming a growth rate of 2.3%, 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 556 526
2023 569 510
2024 582 494
2025 596 478
2026 609 463
Terminal Value

Assuming a growth rate after the projection years of 2.0%, the terminal value of the company would be 17000 million. This corresponds to a present value of 12200 million.

Intrinsic Value Per Share

The total present value of the projected cash flows is 2470 million. Adding in the terminal value gives a total present value of 14700 million.

There are presently 92.5 million outstanding shares, so the intrinsic value per share is 159.11.

Financial Statements

The following data was to determine the past cash flows.

Current Assets 671,000,000
Current Cash 127,000,000
Current Liabilities 459,000,000
Current Debt 6,000,000
Non-Cash Working Capital (NCWC) 91,000,000
Change in NCWC 12,000,000
EBIT 669,000,000
Tax Provision 130,000,000
Depreciation and Amortization 150,000,000
Capital Expenditure -175,000,000
Unlevered Free Cash Flow 503,954,545
Current Assets 756,000,000
Current Cash 310,000,000
Current Liabilities 373,000,000
Current Debt 6,000,000
Non-Cash Working Capital (NCWC) 79,000,000
Change in NCWC -4,000,000
EBIT 534,000,000
Tax Provision 94,000,000
Depreciation and Amortization 148,000,000
Capital Expenditure -115,000,000
Unlevered Free Cash Flow 435,274,809
Current Assets 686,000,000
Current Cash 192,000,000
Current Liabilities 417,000,000
Current Debt 6,000,000
Non-Cash Working Capital (NCWC) 83,000,000
Change in NCWC 15,000,000
EBIT 886,000,000
Tax Provision 164,000,000
Depreciation and Amortization 167,000,000
Capital Expenditure -173,000,000
Unlevered Free Cash Flow 705,802,083
Current Assets 725,000,000
Current Cash 231,000,000
Current Liabilities 426,000,000
Current Debt 0
Non-Cash Working Capital (NCWC) 68,000,000
Change in NCWC 40,000,000
EBIT 927,000,000
Tax Provision 166,000,000
Depreciation and Amortization 164,000,000
Capital Expenditure -103,000,000
Unlevered Free Cash Flow 836,842,236
Current Assets 632,000,000
Current Cash 199,000,000
Current Liabilities 417,000,000
Current Debt 12,000,000
Non-Cash Working Capital (NCWC) 28,000,000
Change in NCWC 15,400,000
EBIT 684,000,000
Tax Provision 23,000,000
Depreciation and Amortization 170,000,000
Capital Expenditure -94,000,000
Unlevered Free Cash Flow 745,548,007
Current Assets 547,600,000
Current Cash 204,700,000
Current Liabilities 342,200,000
Current Debt 11,900,000
Non-Cash Working Capital (NCWC) 12,600,000
Change in NCWC -72,500,000
EBIT 451,500,000
Tax Provision 126,400,000
Depreciation and Amortization 175,900,000
Capital Expenditure -71,600,000
Unlevered Free Cash Flow 316,087,576
Current Assets 616,800,000
Current Cash 251,600,000
Current Liabilities 304,600,000
Current Debt 24,500,000
Non-Cash Working Capital (NCWC) 85,100,000
Change in NCWC -81,900,000
EBIT 524,200,000
Tax Provision 106,500,000
Depreciation and Amortization 185,400,000
Capital Expenditure -60,000,000
Unlevered Free Cash Flow 374,392,174
Current Assets 758,000,000
Current Cash 263,000,000
Current Liabilities 345,900,000
Current Debt 17,900,000
Non-Cash Working Capital (NCWC) 167,000,000
Change in NCWC 114,100,000
EBIT 527,500,000
Tax Provision 139,500,000
Depreciation and Amortization 192,600,000
Capital Expenditure -69,900,000
Unlevered Free Cash Flow 564,391,687
Current Assets 606,900,000
Current Cash 184,700,000
Current Liabilities 387,200,000
Current Debt 17,900,000
Non-Cash Working Capital (NCWC) 52,900,000
Change in NCWC 1,100,000
EBIT 409,900,000
Tax Provision 100,700,000
Depreciation and Amortization 204,000,000
Capital Expenditure -83,200,000
Unlevered Free Cash Flow 376,681,886

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