DCF Tool

WTS

Watts Water Technologies, Inc. – Fluid Power Valve and Hose Fitting Manufacturing
Watts Water Technologies, Inc., through its family of companies, is a global manufacturer headquartered in the USA that provides one of the broadest plumbing, heating, and water quality product lines in the world. Watts Water companies and brands offer innovative plumbing, heating, and water quality solutions for residential, commercial, and industrial applications. The company employs 4,800 people across 27 countries.
Analysis Results
Intrinsic Value $180.10
Latest Price $148.45
Relative Value 18% 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 14.9%.

Weighted Average Cost of Capital (WACC)

The calculated WACC is 9.2%. This value is used as the default discount rate.

Value of Future Flows

Assuming a growth rate of 14.9%, 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 250 229
2023 287 241
2024 330 254
2025 379 267
2026 436 281
Terminal Value

Assuming a growth rate after the projection years of 2.0%, the terminal value of the company would be 6180 million. This corresponds to a present value of 3650 million.

Intrinsic Value Per Share

The total present value of the projected cash flows is 1270 million. Adding in the terminal value gives a total present value of 4920 million.

There are presently 27.3 million outstanding shares, so the intrinsic value per share is 180.1.

Financial Statements

The following data was to determine the past cash flows.

Current Assets 861,500,000
Current Cash 242,000,000
Current Liabilities 408,500,000
Current Debt 0
Non-Cash Working Capital (NCWC) 211,000,000
Change in NCWC 33,200,000
EBIT 258,900,000
Tax Provision 68,400,000
Depreciation and Amortization 45,100,000
Capital Expenditure -26,700,000
Unlevered Free Cash Flow 234,853,865
Current Assets 709,500,000
Current Cash 218,900,000
Current Liabilities 312,800,000
Current Debt 0
Non-Cash Working Capital (NCWC) 177,800,000
Change in NCWC -23,100,000
EBIT 193,000,000
Tax Provision 52,700,000
Depreciation and Amortization 46,500,000
Capital Expenditure -87,600,000
Unlevered Free Cash Flow 67,895,209
Current Assets 734,900,000
Current Cash 219,700,000
Current Liabilities 419,300,000
Current Debt 105,000,000
Non-Cash Working Capital (NCWC) 200,900,000
Change in NCWC 2,400,000
EBIT 201,400,000
Tax Provision 52,400,000
Depreciation and Amortization 46,600,000
Capital Expenditure -29,200,000
Unlevered Free Cash Flow 163,813,594
Current Assets 721,300,000
Current Cash 204,100,000
Current Liabilities 348,700,000
Current Debt 30,000,000
Non-Cash Working Capital (NCWC) 198,500,000
Change in NCWC 0
EBIT 191,800,000
Tax Provision 46,600,000
Depreciation and Amortization 48,500,000
Capital Expenditure -36,600,000
Unlevered Free Cash Flow 152,509,392
Current Assets 783,600,000
Current Cash 280,200,000
Current Liabilities 327,400,000
Current Debt 22,500,000
Non-Cash Working Capital (NCWC) 198,500,000
Change in NCWC -34,700,000
EBIT 170,100,000
Tax Provision 70,000,000
Depreciation and Amortization 52,200,000
Capital Expenditure -29,400,000
Unlevered Free Cash Flow 74,992,452
Current Assets 858,000,000
Current Cash 338,400,000
Current Liabilities 425,500,000
Current Debt 139,100,000
Non-Cash Working Capital (NCWC) 233,200,000
Change in NCWC 14,300,000
EBIT 141,500,000
Tax Provision 43,600,000
Depreciation and Amortization 51,200,000
Capital Expenditure -36,000,000
Unlevered Free Cash Flow 122,726,134
Current Assets 809,000,000
Current Cash 296,200,000
Current Liabilities 295,000,000
Current Debt 1,100,000
Non-Cash Working Capital (NCWC) 218,900,000
Change in NCWC -10,500,000
EBIT 61,800,000
Tax Provision 1,900,000
Depreciation and Amortization 52,500,000
Capital Expenditure -27,700,000
Unlevered Free Cash Flow 76,100,000
Current Assets 874,300,000
Current Cash 301,100,000
Current Liabilities 345,700,000
Current Debt 1,900,000
Non-Cash Working Capital (NCWC) 229,400,000
Change in NCWC -35,100,000
EBIT 134,800,000
Tax Provision 32,800,000
Depreciation and Amortization 48,100,000
Capital Expenditure -23,700,000
Unlevered Free Cash Flow 70,893,742
Current Assets 857,100,000
Current Cash 267,900,000
Current Liabilities 326,900,000
Current Debt 2,200,000
Non-Cash Working Capital (NCWC) 264,500,000
Change in NCWC 13,300,000
EBIT 120,800,000
Tax Provision 26,900,000
Depreciation and Amortization 48,900,000
Capital Expenditure -27,700,000
Unlevered Free Cash Flow 118,289,521
Current Assets 816,000,000
Current Cash 273,900,000
Current Liabilities 368,000,000
Current Debt 77,100,000
Non-Cash Working Capital (NCWC) 251,200,000
Change in NCWC -27,100,000
EBIT 132,700,000
Tax Provision 29,700,000
Depreciation and Amortization 49,400,000
Capital Expenditure -30,700,000
Unlevered Free Cash Flow 85,005,982

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