DCF Tool

TNC

Tennant Co. – Other Commercial and Service Industry Machinery Manufacturing
Founded in 1870, Tennant Company (TNC), headquartered in Minneapolis, Minnesota, is a world leader in designing, manufacturing and marketing solutions that empower customers to achieve quality cleaning performance, reduce their environmental impact and help create a cleaner, safer, healthier world. Its products include equipment for maintaining surfaces in industrial, commercial and outdoor environments; detergent-free and other sustainable cleaning technologies; cleaning tools and supplies; and coatings for protecting, repairing and upgrading surfaces. Tennant's global field service network is the most extensive in the industry. Tennant Company had sales of $1.14 billion in 2019 and has approximately 4,400 employees. Tennant has manufacturing operations throughout the world and sells products directly in 15 countries and through distributors in more than 100 countries. For more information, visit www.tennantco.com and www.ipcworldwide.com. The Tennant Company logo and other trademarks designated with the symbol '®' are trademarks of Tennant Company registered in the United States and/or other countries.
Analysis Results
Intrinsic Value $177.83
Latest Price $70.51
Relative Value 60% 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 10.9%.

Weighted Average Cost of Capital (WACC)

The calculated WACC is 6.7%. This value is used as the default discount rate.

Value of Future Flows

Assuming a growth rate of 10.9%, 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 120 113
2023 133 117
2024 148 122
2025 164 127
2026 182 132
Terminal Value

Assuming a growth rate after the projection years of 2.0%, the terminal value of the company would be 3970 million. This corresponds to a present value of 2690 million.

Intrinsic Value Per Share

The total present value of the projected cash flows is 610 million. Adding in the terminal value gives a total present value of 3300 million.

There are presently 18.6 million outstanding shares, so the intrinsic value per share is 177.83.

Financial Statements

The following data was to determine the past cash flows.

Current Assets 526,800,000
Current Cash 123,600,000
Current Liabilities 290,300,000
Current Debt 4,200,000
Non-Cash Working Capital (NCWC) 117,100,000
Change in NCWC 7,900,000
EBIT 83,900,000
Tax Provision 9,200,000
Depreciation and Amortization 53,100,000
Capital Expenditure -19,500,000
Unlevered Free Cash Flow 114,983,265
Current Assets 493,600,000
Current Cash 141,000,000
Current Liabilities 254,300,000
Current Debt 10,900,000
Non-Cash Working Capital (NCWC) 109,200,000
Change in NCWC -53,600,000
EBIT 63,700,000
Tax Provision 7,400,000
Depreciation and Amortization 53,400,000
Capital Expenditure -30,000,000
Unlevered Free Cash Flow 22,030,900
Current Assets 481,000,000
Current Cash 74,600,000
Current Liabilities 274,900,000
Current Debt 31,300,000
Non-Cash Working Capital (NCWC) 162,800,000
Change in NCWC 1,634,000
EBIT 71,800,000
Tax Provision 8,100,000
Depreciation and Amortization 54,400,000
Capital Expenditure -38,900,000
Unlevered Free Cash Flow 78,164,000
Current Assets 468,644,000
Current Cash 85,609,000
Current Liabilities 248,874,000
Current Debt 27,005,000
Non-Cash Working Capital (NCWC) 161,166,000
Change in NCWC 2,073,000
EBIT 57,978,000
Tax Provision 2,304,000
Depreciation and Amortization 54,420,000
Capital Expenditure -21,555,000
Unlevered Free Cash Flow 89,189,050
Current Assets 423,115,000
Current Cash 58,398,000
Current Liabilities 236,507,000
Current Debt 30,883,000
Non-Cash Working Capital (NCWC) 159,093,000
Change in NCWC 48,574,000
EBIT 27,044,000
Tax Provision 4,913,000
Depreciation and Amortization 43,253,000
Capital Expenditure -20,437,000
Unlevered Free Cash Flow 98,434,000
Current Assets 297,922,000
Current Cash 58,033,000
Current Liabilities 132,829,000
Current Debt 3,459,000
Non-Cash Working Capital (NCWC) 110,519,000
Change in NCWC -2,068,000
EBIT 68,647,000
Tax Provision 19,877,000
Depreciation and Amortization 18,300,000
Capital Expenditure -26,526,000
Unlevered Free Cash Flow 37,831,479
Current Assets 293,644,000
Current Cash 51,300,000
Current Liabilities 133,216,000
Current Debt 3,459,000
Non-Cash Working Capital (NCWC) 112,587,000
Change in NCWC 524,000
EBIT 64,375,000
Tax Provision 18,336,000
Depreciation and Amortization 18,031,000
Capital Expenditure -24,780,000
Unlevered Free Cash Flow 34,740,909
Current Assets 347,089,000
Current Cash 92,962,000
Current Liabilities 145,630,000
Current Debt 3,566,000
Non-Cash Working Capital (NCWC) 112,063,000
Change in NCWC 5,474,000
EBIT 72,097,000
Tax Provision 18,887,000
Depreciation and Amortization 20,063,000
Capital Expenditure -19,583,000
Unlevered Free Cash Flow 58,468,957
Current Assets 315,296,000
Current Cash 80,984,000
Current Liabilities 131,526,000
Current Debt 3,803,000
Non-Cash Working Capital (NCWC) 106,589,000
Change in NCWC 6,735,000
EBIT 62,403,000
Tax Provision 19,647,000
Depreciation and Amortization 20,246,000
Capital Expenditure -14,775,000
Unlevered Free Cash Flow 54,133,504
Current Assets 273,446,000
Current Cash 53,940,000
Current Liabilities 121,694,000
Current Debt 2,042,000
Non-Cash Working Capital (NCWC) 99,854,000
Change in NCWC -77,000
EBIT 61,919,000
Tax Provision 18,306,000
Depreciation and Amortization 20,872,000
Capital Expenditure -15,623,000
Unlevered Free Cash Flow 48,164,815

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