DCF Tool


A.O. Smith Corp. – Heating Equipment (except Warm Air Furnaces) Manufacturing
a. o. smith corporation is one of the world's leading manufacturers of residential and commercial water heaters and boilers, offering a comprehensive product line featuring the best-known brands in north america, china, and india. the company was founded in 1874 in milwaukee, wisconsin where today the company is headquartered. a. o. smith employs approximately 16,100 men and women at operations in the united states, canada, mexico, china, india, the united kingdom, the netherlands, and turkey, which has the global reach to serve customers worldwide. the company also has sales and distribution in more than 60 countries around the world. as a global leader a. o. smith and its employees pride themselves on applying innovative technology and energy-efficient solutions to products marketed worldwide. the company's goal is to be a leading global water technology company, and the focus is on building this platform through new product development, global expansion, strategic acquisitions and p
Analysis Results
Intrinsic Value $200.70
Latest Price $76.74
Relative Value 62% undervalued
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Cash Flow (Billions)
Analysis Parameters
New Ticker
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 14.3%.

Weighted Average Cost of Capital (WACC)

The calculated WACC is 4.2%. This value is used as the default discount rate.

Value of Future Flows

Assuming a growth rate of 14.3%, 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 (billion) Present value (billion)
2023 0.671 0.644
2024 0.766 0.706
2025 0.876 0.774
2026 1.0 0.848
2027 1.14 0.93
Terminal Value

Assuming the company was sold after the projection period at an exit multiple of 30, the terminal value of the company would be 34.3 billion. This corresponds to a present value of 26.8 billion.

Intrinsic Value Per Share

The total present value of the projected cash flows is 3.9 billion. Adding in the terminal value gives a total present value of 30.7 billion.

There are presently 153.0 million outstanding shares, so the intrinsic value per share is 200.7.

Financial Statements

The following data was to determine the past cash flows.

Current Assets 1,633,700,000
Current Cash 481,800,000
Current Liabilities 934,200,000
Current Debt 10,000,000
Non-Cash Working Capital (NCWC) 227,700,000
Change in NCWC 218,500,000
EBIT 658,700,000
Tax Provision -12,000,000
Depreciation and Amortization 76,900,000
Capital Expenditure -70,300,000
Unlevered Free Cash Flow 883,800,000
Current Assets 1,752,600,000
Current Cash 631,400,000
Current Liabilities 1,118,800,000
Current Debt 6,800,000
Non-Cash Working Capital (NCWC) 9,200,000
Change in NCWC -39,700,000
EBIT 609,500,000
Tax Provision 138,500,000
Depreciation and Amortization 77,900,000
Capital Expenditure -75,100,000
Unlevered Free Cash Flow 437,664,338
Current Assets 1,618,000,000
Current Cash 689,600,000
Current Liabilities 886,300,000
Current Debt 6,800,000
Non-Cash Working Capital (NCWC) 48,900,000
Change in NCWC -140,400,000
EBIT 447,900,000
Tax Provision 99,000,000
Depreciation and Amortization 80,000,000
Capital Expenditure -56,800,000
Unlevered Free Cash Flow 230,807,907
Current Assets 1,500,400,000
Current Cash 551,400,000
Current Liabilities 766,500,000
Current Debt 6,800,000
Non-Cash Working Capital (NCWC) 189,300,000
Change in NCWC -18,900,000
EBIT 465,100,000
Tax Provision 102,100,000
Depreciation and Amortization 78,300,000
Capital Expenditure -64,400,000
Unlevered Free Cash Flow 359,513,874
Current Assets 1,638,500,000
Current Cash 645,000,000
Current Liabilities 785,300,000
Current Debt 0
Non-Cash Working Capital (NCWC) 208,200,000
Change in NCWC 42,400,000
EBIT 551,700,000
Tax Provision 113,600,000
Depreciation and Amortization 71,900,000
Capital Expenditure -85,200,000
Unlevered Free Cash Flow 468,442,309
Current Assets 1,766,800,000
Current Cash 820,000,000
Current Liabilities 788,500,000
Current Debt 7,500,000
Non-Cash Working Capital (NCWC) 165,800,000
Change in NCWC 116,800,000
EBIT 520,500,000
Tax Provision 224,300,000
Depreciation and Amortization 70,100,000
Capital Expenditure -94,200,000
Unlevered Free Cash Flow 389,029,205
Current Assets 1,562,000,000
Current Cash 754,600,000
Current Liabilities 765,600,000
Current Debt 7,200,000
Non-Cash Working Capital (NCWC) 49,000,000
Change in NCWC -120,800,000
EBIT 460,400,000
Tax Provision 136,000,000
Depreciation and Amortization 65,100,000
Capital Expenditure -80,700,000
Unlevered Free Cash Flow 188,617,513
Current Assets 1,455,300,000
Current Cash 645,200,000
Current Liabilities 653,200,000
Current Debt 12,900,000
Non-Cash Working Capital (NCWC) 169,800,000
Change in NCWC -15,800,000
EBIT 399,100,000
Tax Provision 119,600,000
Depreciation and Amortization 63,000,000
Capital Expenditure -72,700,000
Unlevered Free Cash Flow 255,010,285
Current Assets 1,319,000,000
Current Cash 541,900,000
Current Liabilities 605,200,000
Current Debt 13,700,000
Non-Cash Working Capital (NCWC) 185,600,000
Change in NCWC 42,700,000
EBIT 287,200,000
Tax Provision 78,900,000
Depreciation and Amortization 59,800,000
Capital Expenditure -86,100,000
Unlevered Free Cash Flow 224,562,399
Current Assets 1,205,600,000
Current Cash 486,000,000
Current Liabilities 590,900,000
Current Debt 14,200,000
Non-Cash Working Capital (NCWC) 142,900,000
Change in NCWC -21,000,000
EBIT 249,300,000
Tax Provision 66,700,000
Depreciation and Amortization 59,700,000
Capital Expenditure -97,700,000
Unlevered Free Cash Flow 119,960,279
Current Assets 1,107,200,000
Current Cash 462,900,000
Current Liabilities 499,000,000
Current Debt 18,600,000
Non-Cash Working Capital (NCWC) 163,900,000
Change in NCWC 82,300,000
EBIT 201,500,000
Tax Provision 71,200,000
Depreciation and Amortization 54,600,000
Capital Expenditure -69,900,000
Unlevered Free Cash Flow 207,136,441

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