DCF Tool

ARL

American Realty Investors Inc. – Lessors of Other Real Estate Property
American Realty Investors, a New York Stock Exchange Company, maintains a commitment to greater shareholder value through the acquisition, financing, operation and sale of real estate and real estate assets. American Realty is highly diverse in location, with a portfolio of properties strategically located throughout the United States. Its holdings include apartments, office buildings, retail centers and parcels of land. At the time of purchase, acquisitions are often referred to as "undervalued" or "underdeveloped." Under ARL ownership, value is added through physical improvements as well as management improvements. The result is increased income through higher rental and occupancy rates and increased income.
Analysis Results
Intrinsic Value $35.93
Latest Price $21.26
Relative Value 41% 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 -9.9%.

Weighted Average Cost of Capital (WACC)

The calculated WACC is 3.4%. This value is used as the default discount rate.

Value of Future Flows

Assuming a growth rate of -9.9%, 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 29.2 28.2
2023 26.3 24.6
2024 23.7 21.4
2025 21.3 18.7
2026 19.2 16.2
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 577 million. This corresponds to a present value of 471 million.

Intrinsic Value Per Share

The total present value of the projected cash flows is 109 million. Adding in the terminal value gives a total present value of 580 million.

There are presently 16.2 million outstanding shares, so the intrinsic value per share is 35.93.

Financial Statements

The following data was to determine the past cash flows.

Current Assets 303,955,000
Current Cash 66,749,000
Current Liabilities 433,718,000
Current Debt 0
Non-Cash Working Capital (NCWC) -196,512,000
Change in NCWC 78,885,000
EBIT -10,215,000
Tax Provision -1,067,000
Depreciation and Amortization 15,029,000
Capital Expenditure -8,070,000
Unlevered Free Cash Flow 75,629,000
Current Assets 296,775,000
Current Cash 36,814,000
Current Liabilities 535,358,000
Current Debt 0
Non-Cash Working Capital (NCWC) -275,397,000
Change in NCWC -238,341,000
EBIT -7,608,000
Tax Provision -147,000
Depreciation and Amortization 18,579,000
Capital Expenditure -17,505,000
Unlevered Free Cash Flow -244,875,000
Current Assets 293,424,000
Current Cash 51,228,000
Current Liabilities 279,252,000
Current Debt 0
Non-Cash Working Capital (NCWC) -37,056,000
Change in NCWC -15,437,000
EBIT 1,551,000
Tax Provision 0
Depreciation and Amortization 13,379,000
Capital Expenditure -33,730,000
Unlevered Free Cash Flow -34,237,000
Current Assets 232,863,000
Current Cash 36,428,000
Current Liabilities 218,054,000
Current Debt 0
Non-Cash Working Capital (NCWC) -21,619,000
Change in NCWC 57,729,000
EBIT 32,802,000
Tax Provision 1,210,000
Depreciation and Amortization 22,670,000
Capital Expenditure -85,055,000
Unlevered Free Cash Flow 27,930,176
Current Assets 193,326,000
Current Cash 42,920,000
Current Liabilities 229,754,000
Current Debt 0
Non-Cash Working Capital (NCWC) -79,348,000
Change in NCWC -82,901,000
EBIT 22,290,000
Tax Provision 180,000
Depreciation and Amortization 25,679,000
Capital Expenditure -78,133,000
Unlevered Free Cash Flow -113,065,000
Current Assets 168,758,000
Current Cash 17,522,000
Current Liabilities 147,683,000
Current Debt 0
Non-Cash Working Capital (NCWC) 3,553,000
Change in NCWC -9,118,000
EBIT 18,246,000
Tax Provision 45,000
Depreciation and Amortization 23,785,000
Capital Expenditure -19,962,000
Unlevered Free Cash Flow 12,951,000
Current Assets 163,622,000
Current Cash 15,232,000
Current Liabilities 135,719,000
Current Debt 0
Non-Cash Working Capital (NCWC) 12,671,000
Change in NCWC -12,658,000
EBIT 29,719,000
Tax Provision 1,000,000
Depreciation and Amortization 21,418,000
Capital Expenditure -15,113,000
Unlevered Free Cash Flow 23,366,000
Current Assets 168,079,000
Current Cash 12,299,000
Current Liabilities 130,451,000
Current Debt 0
Non-Cash Working Capital (NCWC) 25,329,000
Change in NCWC 27,247,000
EBIT 61,556,000
Tax Provision 0
Depreciation and Amortization 18,345,000
Capital Expenditure -11,172,000
Unlevered Free Cash Flow 95,976,000
Current Assets 167,338,000
Current Cash 16,437,000
Current Liabilities 152,819,000
Current Debt 0
Non-Cash Working Capital (NCWC) -1,918,000
Change in NCWC 83,497,000
EBIT 94,842,000
Tax Provision -6,802,000
Depreciation and Amortization 21,518,000
Capital Expenditure -8,080,000
Unlevered Free Cash Flow 191,777,000
Current Assets 120,610,000
Current Cash 17,141,000
Current Liabilities 188,884,000
Current Debt 0
Non-Cash Working Capital (NCWC) -85,415,000
Change in NCWC 29,396,000
EBIT 31,210,000
Tax Provision 0
Depreciation and Amortization 22,563,000
Capital Expenditure -8,481,000
Unlevered Free Cash Flow 74,688,000

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