DCF Tool

FSS

Federal Signal Corp. – Heavy Duty Truck Manufacturing
Federal Signal Corporation builds and delivers equipment of unmatched quality that moves material, cleans infrastructure, and protects the communities where the company works and lives. Founded in 1901, Federal Signal is a leading global designer, manufacturer and supplier of products and total solutions that serve municipal, governmental, industrial and commercial customers. Headquartered in Oak Brook, Ill., with manufacturing facilities worldwide, the Company operates two groups: Environmental Solutions and Safety and Security Systems.
Analysis Results
Intrinsic Value $83.79
Latest Price $37.32
Relative Value 55% 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 14.1%.

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 14.1%, 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 190 177
2023 217 188
2024 247 200
2025 282 213
2026 322 227
Terminal Value

Assuming a growth rate after the projection years of 2.0%, the terminal value of the company would be 6210 million. This corresponds to a present value of 4070 million.

Intrinsic Value Per Share

The total present value of the projected cash flows is 1010 million. Adding in the terminal value gives a total present value of 5080 million.

There are presently 60.6 million outstanding shares, so the intrinsic value per share is 83.79.

Financial Statements

The following data was to determine the past cash flows.

Current Assets 431,000,000
Current Cash 40,500,000
Current Liabilities 170,400,000
Current Debt 600,000
Non-Cash Working Capital (NCWC) 220,700,000
Change in NCWC 45,100,000
EBIT 128,600,000
Tax Provision 17,000,000
Depreciation and Amortization 50,400,000
Capital Expenditure -37,400,000
Unlevered Free Cash Flow 168,109,863
Current Assets 405,500,000
Current Cash 81,700,000
Current Liabilities 148,400,000
Current Debt 200,000
Non-Cash Working Capital (NCWC) 175,600,000
Change in NCWC 6,500,000
EBIT 134,800,000
Tax Provision 28,500,000
Depreciation and Amortization 44,800,000
Capital Expenditure -29,700,000
Unlevered Free Cash Flow 125,566,934
Current Assets 360,700,000
Current Cash 31,600,000
Current Liabilities 160,200,000
Current Debt 200,000
Non-Cash Working Capital (NCWC) 169,100,000
Change in NCWC 36,600,000
EBIT 149,600,000
Tax Provision 30,200,000
Depreciation and Amortization 41,500,000
Capital Expenditure -35,400,000
Unlevered Free Cash Flow 159,703,174
Current Assets 328,500,000
Current Cash 37,400,000
Current Liabilities 158,800,000
Current Debt 200,000
Non-Cash Working Capital (NCWC) 132,500,000
Change in NCWC -17,000,000
EBIT 123,000,000
Tax Provision 17,900,000
Depreciation and Amortization 36,400,000
Capital Expenditure -14,100,000
Unlevered Free Cash Flow 108,571,505
Current Assets 303,800,000
Current Cash 37,500,000
Current Liabilities 117,100,000
Current Debt 300,000
Non-Cash Working Capital (NCWC) 149,500,000
Change in NCWC 25,000,000
EBIT 76,500,000
Tax Provision 500,000
Depreciation and Amortization 30,000,000
Capital Expenditure -8,000,000
Unlevered Free Cash Flow 122,872,950
Current Assets 259,600,000
Current Cash 50,700,000
Current Liabilities 84,900,000
Current Debt 500,000
Non-Cash Working Capital (NCWC) 124,500,000
Change in NCWC 2,200,000
EBIT 60,800,000
Tax Provision 17,400,000
Depreciation and Amortization 19,100,000
Capital Expenditure -6,100,000
Unlevered Free Cash Flow 57,374,647
Current Assets 315,100,000
Current Cash 76,000,000
Current Liabilities 117,200,000
Current Debt 400,000
Non-Cash Working Capital (NCWC) 122,300,000
Change in NCWC -4,900,000
EBIT 103,600,000
Tax Provision 34,100,000
Depreciation and Amortization 12,300,000
Capital Expenditure -9,600,000
Unlevered Free Cash Flow 66,037,037
Current Assets 290,500,000
Current Cash 30,400,000
Current Liabilities 139,100,000
Current Debt 6,200,000
Non-Cash Working Capital (NCWC) 127,200,000
Change in NCWC 10,700,000
EBIT 92,600,000
Tax Provision 24,300,000
Depreciation and Amortization 15,000,000
Capital Expenditure -19,500,000
Unlevered Free Cash Flow 73,024,742
Current Assets 265,500,000
Current Cash 23,800,000
Current Liabilities 132,600,000
Current Debt 7,400,000
Non-Cash Working Capital (NCWC) 116,500,000
Change in NCWC 23,600,000
EBIT 71,300,000
Tax Provision -107,200,000
Depreciation and Amortization 14,200,000
Capital Expenditure -17,000,000
Unlevered Free Cash Flow 92,100,000
Current Assets 267,200,000
Current Cash 29,700,000
Current Liabilities 149,600,000
Current Debt 5,000,000
Non-Cash Working Capital (NCWC) 92,900,000
Change in NCWC -33,600,000
EBIT 52,900,000
Tax Provision 3,900,000
Depreciation and Amortization 13,200,000
Capital Expenditure -13,000,000
Unlevered Free Cash Flow 11,534,362

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