DCF Tool

FRD

Friedman Industries, Inc. – Iron and Steel Pipe and Tube Manufacturing from Purchased Steel
For over 50 years Friedman Industries has helped its customers succeed by consistently providing high quality steel products at highly competitive prices with quick delivery. Founded in 1965 and headquartered in Longview, Texas, Friedman operates in two divisions: the Flat Roll Division and the Tubular Division.
Analysis Results
Intrinsic Value $779.38
Latest Price $7.11
Relative Value 99% undervalued
Thoughts on this result? Let us know.
Ad
Cash Flow (Millions)
Analysis Parameters
%
%
%
New Ticker
Ad
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 47.0%.

Weighted Average Cost of Capital (WACC)

The calculated WACC is 4.8%. This value is used as the default discount rate.

Value of Future Flows

Assuming a growth rate of 47.0%, 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)
2023 49.4 47.1
2024 72.6 66.1
2025 107 92.8
2026 157 130
2027 231 183
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 6930 million. This corresponds to a present value of 5220 million.

Intrinsic Value Per Share

The total present value of the projected cash flows is 519 million. Adding in the terminal value gives a total present value of 5740 million.

There are presently 7.37 million outstanding shares, so the intrinsic value per share is 779.38.

Financial Statements

The following data was to determine the past cash flows.

Current Assets 125,361,815
Current Cash 2,598,102
Current Liabilities 60,810,607
Current Debt 104,689
Non-Cash Working Capital (NCWC) 62,057,795
Change in NCWC 20,165,333
EBIT 28,519,912
Tax Provision 4,264,236
Depreciation and Amortization 1,320,434
Capital Expenditure -8,064,599
Unlevered Free Cash Flow 35,306,495
Current Assets 77,534,635
Current Cash 8,191,001
Current Liabilities 29,072,271
Current Debt 1,621,099
Non-Cash Working Capital (NCWC) 41,892,462
Change in NCWC 3,283,327
EBIT 15,750,014
Tax Provision 3,797,498
Depreciation and Amortization 1,012,917
Capital Expenditure -4,609,617
Unlevered Free Cash Flow 11,507,410
Current Assets 65,211,517
Current Cash 17,057,751
Current Liabilities 9,645,359
Current Debt 100,728
Non-Cash Working Capital (NCWC) 38,609,135
Change in NCWC -11,815,009
EBIT -2,514,237
Tax Provision -1,588,992
Depreciation and Amortization 1,524,961
Capital Expenditure -4,935,361
Unlevered Free Cash Flow -17,739,646
Current Assets 74,456,207
Current Cash 11,667,161
Current Liabilities 12,364,902
Current Debt 0
Non-Cash Working Capital (NCWC) 50,424,144
Change in NCWC 5,528,057
EBIT 8,124,527
Tax Provision 1,724,021
Depreciation and Amortization 1,340,492
Capital Expenditure -807,989
Unlevered Free Cash Flow 12,132,483
Current Assets 59,979,304
Current Cash 4,052,582
Current Liabilities 11,030,635
Current Debt 0
Non-Cash Working Capital (NCWC) 44,896,087
Change in NCWC 3,281,536
EBIT 4,070,240
Tax Provision 1,307,890
Depreciation and Amortization 1,356,347
Capital Expenditure -349,184
Unlevered Free Cash Flow 7,050,101
Current Assets 45,432,836
Current Cash 1,461,695
Current Liabilities 2,356,590
Current Debt 0
Non-Cash Working Capital (NCWC) 41,614,551
Change in NCWC -2,424,593
EBIT -4,209,821
Tax Provision -1,472,132
Depreciation and Amortization 1,594,406
Capital Expenditure -799,331
Unlevered Free Cash Flow -5,839,339
Current Assets 49,701,656
Current Cash 2,796,762
Current Liabilities 2,865,750
Current Debt 0
Non-Cash Working Capital (NCWC) 44,039,144
Change in NCWC -1,201,176
EBIT 23,371
Tax Provision 104,681
Depreciation and Amortization 1,673,721
Capital Expenditure -2,124,649
Unlevered Free Cash Flow -1,634,869
Current Assets 50,117,355
Current Cash 2,225,924
Current Liabilities 2,651,111
Current Debt 0
Non-Cash Working Capital (NCWC) 45,240,320
Change in NCWC 8,245,365
EBIT 624,776
Tax Provision 303,486
Depreciation and Amortization 1,721,625
Capital Expenditure -5,876,205
Unlevered Free Cash Flow 4,439,086
Current Assets 59,846,668
Current Cash 15,081,024
Current Liabilities 7,770,689
Current Debt 0
Non-Cash Working Capital (NCWC) 36,994,955
Change in NCWC 946,774
EBIT 2,474,696
Tax Provision 823,782
Depreciation and Amortization 1,823,072
Capital Expenditure -1,907,231
Unlevered Free Cash Flow 2,533,667
Current Assets 64,283,557
Current Cash 15,923,294
Current Liabilities 12,312,082
Current Debt 0
Non-Cash Working Capital (NCWC) 36,048,181
Change in NCWC -3,224,774
EBIT 9,086,513
Tax Provision 3,009,465
Depreciation and Amortization 1,790,041
Capital Expenditure -499,486
Unlevered Free Cash Flow 4,162,166

This analysis is provided for informational purposes only and does not constitute financial or investing advice. For more information on the advantages and limitations of DCF analysis see background. This information is provided on an "as is" basis. No warranty, expressed or implied, is made regarding accuracy, adequacy, completeness, legality, reliability or usefulness of any information. By using this site you agree that under no circumstances shall Valuation Tools LLC be held liable for any loss or damage caused by information obtained from this website including any articles, data, videos, its social media accounts, or any other materials.