DCF Tool

MEI

Methode Electronics, Inc. – Electronic Connector Manufacturing
Methode Electronics, Inc. is a global developer of custom engineered and application specific products and solutions with manufacturing, design and testing facilities in Belgium, Canada, China, Egypt, Germany, India, Italy, Lebanon, Malta, Mexico, the Netherlands, Singapore, Switzerland, the United Kingdom and the United States. The company designs, manufactures and markets devices employing electrical, electronic, LED lighting, sensor, and radio remote control technologies. Its business is managed on a segment basis, with those segments being Automotive, Industrial, Interface and Medical.
Analysis Results
Intrinsic Value $126.31
Latest Price $42.62
Relative Value 66% 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 11.4%.

Weighted Average Cost of Capital (WACC)

The calculated WACC is 6.8%. This value is used as the default discount rate.

Value of Future Flows

Assuming a growth rate of 11.4%, 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 173 162
2023 193 169
2024 215 176
2025 239 184
2026 266 191
Terminal Value

Assuming a growth rate after the projection years of 2.0%, the terminal value of the company would be 5620 million. This corresponds to a present value of 3780 million.

Intrinsic Value Per Share

The total present value of the projected cash flows is 882 million. Adding in the terminal value gives a total present value of 4660 million.

There are presently 36.9 million outstanding shares, so the intrinsic value per share is 126.31.

Financial Statements

The following data was to determine the past cash flows.

Current Assets 674,000,000
Current Cash 233,200,000
Current Liabilities 222,700,000
Current Debt 14,900,000
Non-Cash Working Capital (NCWC) 233,000,000
Change in NCWC 13,200,000
EBIT 127,900,000
Tax Provision 12,600,000
Depreciation and Amortization 51,500,000
Capital Expenditure -24,900,000
Unlevered Free Cash Flow 155,753,817
Current Assets 565,600,000
Current Cash 217,300,000
Current Liabilities 143,800,000
Current Debt 15,300,000
Non-Cash Working Capital (NCWC) 219,800,000
Change in NCWC 14,700,000
EBIT 147,100,000
Tax Provision 25,300,000
Depreciation and Amortization 48,300,000
Capital Expenditure -45,100,000
Unlevered Free Cash Flow 139,972,225
Current Assets 453,500,000
Current Cash 83,200,000
Current Liabilities 180,900,000
Current Debt 15,700,000
Non-Cash Working Capital (NCWC) 205,100,000
Change in NCWC 53,800,000
EBIT 106,800,000
Tax Provision 12,000,000
Depreciation and Amortization 43,300,000
Capital Expenditure -49,800,000
Unlevered Free Cash Flow 141,729,343
Current Assets 550,000,000
Current Cash 246,100,000
Current Liabilities 157,000,000
Current Debt 4,400,000
Non-Cash Working Capital (NCWC) 151,300,000
Change in NCWC 39,400,000
EBIT 118,300,000
Tax Provision 66,600,000
Depreciation and Amortization 28,100,000
Capital Expenditure -48,400,000
Unlevered Free Cash Flow 73,758,804
Current Assets 530,300,000
Current Cash 294,000,000
Current Liabilities 124,400,000
Current Debt 0
Non-Cash Working Capital (NCWC) 111,900,000
Change in NCWC -38,600,000
EBIT 110,800,000
Tax Provision 23,000,000
Depreciation and Amortization 24,300,000
Capital Expenditure -22,400,000
Unlevered Free Cash Flow 52,112,079
Current Assets 496,200,000
Current Cash 227,800,000
Current Liabilities 117,900,000
Current Debt 0
Non-Cash Working Capital (NCWC) 150,500,000
Change in NCWC 10,900,000
EBIT 109,700,000
Tax Provision 26,300,000
Depreciation and Amortization 23,900,000
Capital Expenditure -23,200,000
Unlevered Free Cash Flow 95,284,580
Current Assets 438,300,000
Current Cash 168,100,000
Current Liabilities 130,600,000
Current Debt 0
Non-Cash Working Capital (NCWC) 139,600,000
Change in NCWC -6,600,000
EBIT 123,300,000
Tax Provision 19,800,000
Depreciation and Amortization 23,400,000
Capital Expenditure -22,500,000
Unlevered Free Cash Flow 97,390,231
Current Assets 381,700,000
Current Cash 116,400,000
Current Liabilities 119,100,000
Current Debt 0
Non-Cash Working Capital (NCWC) 146,200,000
Change in NCWC 43,828,000
EBIT 75,300,000
Tax Provision -20,300,000
Depreciation and Amortization 23,900,000
Capital Expenditure -29,000,000
Unlevered Free Cash Flow 114,028,000
Current Assets 258,654,000
Current Cash 65,811,000
Current Liabilities 90,471,000
Current Debt 0
Non-Cash Working Capital (NCWC) 102,372,000
Change in NCWC 40,613,000
EBIT 23,504,000
Tax Provision -2,493,000
Depreciation and Amortization 18,806,000
Capital Expenditure -38,555,000
Unlevered Free Cash Flow 44,368,000
Current Assets 240,433,000
Current Cash 86,797,000
Current Liabilities 91,877,000
Current Debt 0
Non-Cash Working Capital (NCWC) 61,759,000
Change in NCWC -13,902,000
EBIT 11,357,000
Tax Provision 3,236,000
Depreciation and Amortization 16,159,000
Capital Expenditure -25,744,000
Unlevered Free Cash Flow -15,361,447

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