TDG Intrinsic Value

TDG

Transdigm Group Incorporated – Small Arms Ammunition Manufacturing

TransDigm Group, through its wholly-owned subsidiaries, is a leading global designer, producer and supplier of highly engineered aircraft components for use on nearly all commercial and military aircraft in service today. Major product offerings, substantially all of which are ultimately provided to end-users in the aerospace industry, include mechanical/electro-mechanical actuators and controls, ignition systems and engine technology, specialized pumps and valves, power conditioning devices, specialized AC/DC electric motors and generators, batteries and chargers, engineered latching and locking devices, engineered rods, engineered connectors and elastomer sealing solutions, databus and power controls, cockpit security components and systems, specialized and advanced cockpit displays, aircraft audio systems, specialized lavatory components, seat belts and safety restraints, engineered and customized interior surfaces and related components, advanced sensor products, switches and relay panels, thermal protection and insulation, lighting and control technology, parachutes, high performance hoists, winches and lifting devices, and cargo loading, handling and delivery systems.

Analysis Results

Intrinsic Value	$1,931.72
Latest Price	$716.46
Relative Value	63% undervalued

Share results:

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Cash Flow (Billions)

Analysis Parameters

New Ticker

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 11.8%.

Weighted Average Cost of Capital (WACC)

The calculated WACC is 3.6%. This value is used as the default discount rate.

Value of Future Flows

Assuming a growth rate of 11.8%, 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	2.43	2.34
2024	2.71	2.52
2025	3.03	2.72
2026	3.39	2.94
2027	3.79	3.17

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 114 billion. This corresponds to a present value of 91.8 billion.

Intrinsic Value Per Share

The total present value of the projected cash flows is 13.7 billion. Adding in the terminal value gives a total present value of 105 billion.

There are presently 54.6 million outstanding shares, so the intrinsic value per share is 1931.72.

Financial Statements

The following data was to determine the past cash flows.

Current Assets	5,649,000,000
Current Cash	3,001,000,000
Current Liabilities	1,426,000,000
Current Debt	426,000,000
Non-Cash Working Capital (NCWC)	1,648,000,000
Change in NCWC	442,000,000
EBIT	2,215,000,000
Tax Provision	261,000,000
Depreciation and Amortization	253,000,000
Capital Expenditure	-119,000,000
Unlevered Free Cash Flow	2,278,031,943

Current Assets	7,030,000,000
Current Cash	4,787,000,000
Current Liabilities	1,663,000,000
Current Debt	626,000,000
Non-Cash Working Capital (NCWC)	1,206,000,000
Change in NCWC	-46,000,000
EBIT	1,691,000,000
Tax Provision	34,000,000
Depreciation and Amortization	253,000,000
Capital Expenditure	-105,000,000
Unlevered Free Cash Flow	1,712,588,811

Current Assets	6,960,000,000
Current Cash	4,717,000,000
Current Liabilities	1,616,000,000
Current Debt	625,000,000
Non-Cash Working Capital (NCWC)	1,252,000,000
Change in NCWC	-1,036,737,000
EBIT	1,751,000,000
Tax Provision	87,000,000
Depreciation and Amortization	283,000,000
Capital Expenditure	-105,000,000
Unlevered Free Cash Flow	686,402,189

Current Assets	4,865,247,000
Current Cash	1,467,486,000
Current Liabilities	1,538,756,000
Current Debt	429,732,000
Non-Cash Working Capital (NCWC)	2,288,737,000
Change in NCWC	1,229,513,000
EBIT	1,926,546,000
Tax Provision	221,986,000
Depreciation and Amortization	225,700,000
Capital Expenditure	-101,591,000
Unlevered Free Cash Flow	2,877,796,823

Current Assets	3,657,287,000
Current Cash	2,073,017,000
Current Liabilities	900,382,000
Current Debt	375,336,000
Non-Cash Working Capital (NCWC)	1,059,224,000
Change in NCWC	78,186,000
EBIT	1,654,961,000
Tax Provision	24,021,000
Depreciation and Amortization	129,844,000
Capital Expenditure	-73,341,000
Unlevered Free Cash Flow	1,749,313,603

Current Assets	2,133,552,000
Current Cash	650,561,000
Current Liabilities	870,994,000
Current Debt	369,041,000
Non-Cash Working Capital (NCWC)	981,038,000
Change in NCWC	137,522,000
EBIT	1,479,826,000
Tax Provision	208,889,000
Depreciation and Amortization	141,025,000
Capital Expenditure	-71,013,000
Unlevered Free Cash Flow	1,318,231,388

Current Assets	2,930,697,000
Current Cash	1,586,994,000
Current Liabilities	752,603,000
Current Debt	252,416,000
Non-Cash Working Capital (NCWC)	843,516,000
Change in NCWC	139,962,000
EBIT	1,267,760,000
Tax Provision	181,702,000
Depreciation and Amortization	121,670,000
Capital Expenditure	-43,982,000
Unlevered Free Cash Flow	1,185,514,505

Current Assets	1,831,962,000
Current Cash	714,033,000
Current Liabilities	658,215,000
Current Debt	243,840,000
Non-Cash Working Capital (NCWC)	703,554,000
Change in NCWC	180,138,000
EBIT	1,074,002,000
Tax Provision	189,612,000
Depreciation and Amortization	93,663,000
Capital Expenditure	-54,871,000
Unlevered Free Cash Flow	973,151,861

Current Assets	1,689,576,000
Current Cash	819,548,000
Current Liabilities	585,907,000
Current Debt	239,295,000
Non-Cash Working Capital (NCWC)	523,416,000
Change in NCWC	59,116,000
EBIT	927,820,000
Tax Provision	141,600,000
Depreciation and Amortization	96,385,000
Capital Expenditure	-34,146,000
Unlevered Free Cash Flow	756,251,069

Current Assets	1,320,495,000
Current Cash	564,740,000
Current Liabilities	322,500,000
Current Debt	31,045,000
Non-Cash Working Capital (NCWC)	464,300,000
Change in NCWC	67,708,000
EBIT	749,455,000
Tax Provision	145,700,000
Depreciation and Amortization	73,515,000
Capital Expenditure	-35,535,000
Unlevered Free Cash Flow	611,668,592

Current Assets	1,050,531,000
Current Cash	440,524,000
Current Liabilities	233,915,000
Current Debt	20,500,000
Non-Cash Working Capital (NCWC)	396,592,000
Change in NCWC	93,842,000
EBIT	699,775,000
Tax Provision	162,900,000
Depreciation and Amortization	68,227,000
Capital Expenditure	-25,246,000
Unlevered Free Cash Flow	602,942,351

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