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AVNS

Avanos Medical Inc – Surgical and Medical Instrument Manufacturing
Avanos Medical is a medical technology company focused on delivering clinically superior breakthrough medical device solutions to improve patients' quality of life. Headquartered in Alpharetta, Georgia, Avanos is committed to addressing some of today's most important healthcare needs, such as reducing the use of opioids while helping patients move from surgery to recovery. Avanos develops, manufactures and markets its recognized brands in more than 90 countries.
Analysis Results
Intrinsic Value $4.63
Latest Price $28.38
Relative Value 513% overvalued
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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 -19.5%.

Weighted Average Cost of Capital (WACC)

The calculated WACC is 7.3%. This value is used as the default discount rate.

Value of Future Flows

Assuming a growth rate of -19.5%, 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 26.8 25.0
2023 21.6 18.8
2024 17.4 14.1
2025 14.0 10.6
2026 11.2 7.92
Terminal Value

Assuming a growth rate after the projection years of 2.0%, the terminal value of the company would be 218 million. This corresponds to a present value of 143 million.

Intrinsic Value Per Share

The total present value of the projected cash flows is 76.3 million. Adding in the terminal value gives a total present value of 219 million.

There are presently 47.3 million outstanding shares, so the intrinsic value per share is 4.63.

Financial Statements

The following data was to determine the past cash flows.

Current Assets 418,600,000
Current Cash 118,500,000
Current Liabilities 139,200,000
Current Debt 0
Non-Cash Working Capital (NCWC) 160,900,000
Change in NCWC -28,500,000
EBIT 31,700,000
Tax Provision 600,000
Depreciation and Amortization 38,300,000
Capital Expenditure -21,000,000
Unlevered Free Cash Flow 17,220,689
Current Assets 467,200,000
Current Cash 111,500,000
Current Liabilities 166,300,000
Current Debt 0
Non-Cash Working Capital (NCWC) 189,400,000
Change in NCWC 68,700,000
EBIT 5,800,000
Tax Provision -33,300,000
Depreciation and Amortization 42,900,000
Capital Expenditure -20,200,000
Unlevered Free Cash Flow 97,200,000
Current Assets 538,500,000
Current Cash 205,300,000
Current Liabilities 212,500,000
Current Debt 0
Non-Cash Working Capital (NCWC) 120,700,000
Change in NCWC 55,900,000
EBIT -34,600,000
Tax Provision -18,100,000
Depreciation and Amortization 36,900,000
Capital Expenditure -50,600,000
Unlevered Free Cash Flow 7,600,000
Current Assets 713,600,000
Current Cash 384,500,000
Current Liabilities 264,300,000
Current Debt 0
Non-Cash Working Capital (NCWC) 64,800,000
Change in NCWC -526,200,000
EBIT 8,700,000
Tax Provision -9,600,000
Depreciation and Amortization 33,500,000
Capital Expenditure -49,100,000
Unlevered Free Cash Flow -533,100,000
Current Assets 1,160,700,000
Current Cash 219,700,000
Current Liabilities 389,800,000
Current Debt 39,800,000
Non-Cash Working Capital (NCWC) 591,000,000
Change in NCWC 435,600,000
EBIT -23,000,000
Tax Provision -40,100,000
Depreciation and Amortization 59,500,000
Capital Expenditure -43,200,000
Unlevered Free Cash Flow 428,900,000
Current Assets 593,500,000
Current Cash 113,700,000
Current Liabilities 324,400,000
Current Debt 0
Non-Cash Working Capital (NCWC) 155,400,000
Change in NCWC -75,900,000
EBIT 105,700,000
Tax Provision 15,500,000
Depreciation and Amortization 65,200,000
Capital Expenditure -29,100,000
Unlevered Free Cash Flow 36,273,417
Current Assets 676,000,000
Current Cash 129,500,000
Current Liabilities 315,200,000
Current Debt 0
Non-Cash Working Capital (NCWC) 231,300,000
Change in NCWC 47,500,000
EBIT 100,800,000
Tax Provision 15,800,000
Depreciation and Amortization 65,400,000
Capital Expenditure -70,400,000
Unlevered Free Cash Flow 143,300,000

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