DCF Tool

GGB

Gerdau S.A. – Rolled Steel Shape Manufacturing
Gerdau is the largest producer of long steel in the Americas, with steel mills in Brazil, Argentina, Canada, Colombia, Dominican Republic, Mexico, Peru, United States, Uruguay and Venezuela.
Analysis Results
Intrinsic Value $424.84
Latest Price $4.40
Relative Value 99% undervalued
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Cash Flow (Billions)
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 58.1%.

Weighted Average Cost of Capital (WACC)

The calculated WACC is 6.1%. This value is used as the default discount rate.

Value of Future Flows

Assuming a growth rate of 58.1%, 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 (billion) Present value (billion)
2023 4.11 3.87
2024 6.5 5.77
2025 10.3 8.59
2026 16.2 12.8
2027 25.7 19.0
Terminal Value

Assuming a growth rate after the projection years of 2.0%, the terminal value of the company would be 631 billion. This corresponds to a present value of 441 billion.

Intrinsic Value Per Share

The total present value of the projected cash flows is 50.1 billion. Adding in the terminal value gives a total present value of 491 billion.

There are presently 1.16 billion outstanding shares, so the intrinsic value per share is 424.84.

Financial Statements

The following data was to determine the past cash flows.

Current Assets 5,912,911,109
Current Cash 1,028,128,937
Current Liabilities 2,546,692,582
Current Debt 642,619,979
Non-Cash Working Capital (NCWC) 2,980,709,569
Change in NCWC 493,340,638
EBIT 3,311,431,625
Tax Provision 828,457,522
Depreciation and Amortization 542,288,368
Capital Expenditure -847,711,064
Unlevered Free Cash Flow 2,584,896,743
Current Assets 5,858,472,045
Current Cash 1,218,139,818
Current Liabilities 2,519,395,853
Current Debt 366,432,558
Non-Cash Working Capital (NCWC) 2,487,368,931
Change in NCWC 1,345,243,295
EBIT 3,347,684,645
Tax Provision 846,025,307
Depreciation and Amortization 477,171,497
Capital Expenditure -572,975,500
Unlevered Free Cash Flow 3,818,744,662
Current Assets 4,507,039,983
Current Cash 1,474,467,435
Current Liabilities 2,210,665,819
Current Debt 320,218,907
Non-Cash Working Capital (NCWC) 1,142,125,635
Change in NCWC -419,950,309
EBIT 1,045,667,143
Tax Provision 213,251,700
Depreciation and Amortization 481,154,414
Capital Expenditure -347,523,428
Unlevered Free Cash Flow 428,022,674
Current Assets 4,534,953,087
Current Cash 1,565,374,506
Current Liabilities 1,846,372,937
Current Debt 438,870,302
Non-Cash Working Capital (NCWC) 1,562,075,945
Change in NCWC -363,830,235
EBIT 797,030,797
Tax Provision 113,856,320
Depreciation and Amortization 515,846,598
Capital Expenditure -434,353,680
Unlevered Free Cash Flow 296,802,130
Current Assets 4,510,115,566
Current Cash 863,113,493
Current Liabilities 2,191,337,722
Current Debt 470,241,828
Non-Cash Working Capital (NCWC) 1,925,906,180
Change in NCWC -760,656,629
EBIT 1,091,979,334
Tax Provision -43,534,534
Depreciation and Amortization 487,474,135
Capital Expenditure -325,269,464
Unlevered Free Cash Flow 493,527,376
Current Assets 5,430,857,793
Current Cash 1,019,859,274
Current Liabilities 2,329,775,634
Current Debt 605,339,925
Non-Cash Working Capital (NCWC) 2,686,562,809
Change in NCWC 52,455,526
EBIT 606,097,679
Tax Provision 89,212,347
Depreciation and Amortization 631,980,619
Capital Expenditure -275,216,094
Unlevered Free Cash Flow 1,015,317,730
Current Assets 5,470,029,227
Current Cash 1,556,288,005
Current Liabilities 2,649,918,255
Current Debt 1,370,284,316
Non-Cash Working Capital (NCWC) 2,634,107,282
Change in NCWC 149,191,346
EBIT 393,899,187
Tax Provision 93,534,348
Depreciation and Amortization 779,454,437
Capital Expenditure -423,523,899
Unlevered Free Cash Flow 899,021,071

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