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Altra Industrial Motion Corp.

Intrinsic Value Analysis (Discounted Cash Flow)Industry: Industrial - MachinerySector: Industrials

Fair Value Summary

Current Price$61.98
5Y Range37.05 – 60.52
5Y Selected48.79
(-) Safety Margin75.58%
5Y Buy Price$11.91
Upside (to Buy Price)-80.78%
10Y Range37.67 – 58.62
10Y Selected48.14
(-) Safety Margin75.58%
10Y Buy Price$11.76
Upside (to Buy Price)-81.03%

Company Predictability & Safety

MetricValue
Revenue R2 (5Y)0.6566
Revenue R2 (10Y)0.8493
Net Income R2 (5Y)0.0391
Net Income R2 (10Y)0.0723
EBITDA R2 (5Y)0.4849
EBITDA R2 (10Y)0.7639
FCF R2 (5Y)0.0103
FCF R2 (10Y)0.3360
Safety Score0.2442

DA 10-Year Projection

Metric2023202420252026202720282029203020312032
% Growth-0.74%-0.22%0.31%0.84%1.36%1.89%2.42%2.95%3.47%4.00%
Revenue1,931.031,926.841,932.821,949.011,975.612,012.982,061.672,122.402,196.112,283.95
EBITDA350.37349.62350.70353.64358.46365.24374.08385.10398.47414.41
D&A-106.77-106.53-106.86-107.76-109.23-111.30-113.99-117.35-121.42-126.28
EBIT243.61243.08243.84245.88249.23253.95260.09267.75277.05288.13
Pro forma Taxes-70.11-69.96-70.17-70.76-71.73-73.08-74.85-77.06-79.73-82.92
NOPAT173.50173.12173.66175.12177.51180.86185.24190.70197.32205.21
Capital Expenditures-54.26-54.14-54.31-54.77-55.51-56.56-57.93-59.64-61.71-64.18
NWC Investment2.850.82-1.18-3.19-5.24-7.36-9.59-11.96-14.52-17.30
(+) D&A106.77106.53106.86107.76109.23111.30113.99117.35121.42126.28
Free Cash Flow228.86226.34225.04224.92225.99228.24231.71236.44242.52250.01
Diluted Shares Outstanding65,375,000.0065,375,000.0065,375,000.0065,375,000.0065,375,000.0065,375,000.0065,375,000.0065,375,000.0065,375,000.0065,375,000.00

Discounting Periods

MetricDec-23Dec-24Dec-25Dec-26Dec-27Dec-28Dec-29Dec-30Dec-31Dec-32
Period Start12/31/221/1/241/1/251/1/261/1/271/1/281/1/291/1/301/1/311/1/32
Period End12/31/2312/31/2412/31/2512/31/2612/31/2712/31/2812/31/2912/31/3012/31/3112/31/32
Mid-Point7/1/237/1/247/2/257/2/267/2/277/1/287/2/297/2/307/2/317/1/32
Time (t)0.100.100.100.461.462.463.464.465.466.46
Valuation Date1/16/26

Base Case Projected Flows

WACC: 9.10%Terminal Growth: 2.42%
Metric2023202420252026202720282029203020312032TV (5y)TV (10y)
Discount Factor0.990.990.990.960.880.810.740.680.620.57
PV UFCF226.87224.38223.09216.09199.01184.23171.43160.35150.75142.45
Raw: 3,468.50
2,924.29
Raw: 3,837.27
2,093.23

Base Case Valuation

5-Year Horizon10-Year Horizon
UFCFUFCF
Enterprise Value4,013.723,991.88
(-) Net Debt996.68996.68
Equity Value3,017.052,995.21
(/) Shares Out65.3865.38
Fair Value$46.15$45.82
(-) Safety Margin75.58%75.58%
Buy Price$11.27$11.19
Current Price$61.98$61.98
Upside (to Buy Price)-81.82%-81.95%

Conservative Projected Flows

WACC: 10.10%Terminal Growth: 1.92%
Metric2023202420252026202720282029203020312032TV (5y)TV (10y)
Discount Factor0.990.990.990.960.870.790.720.650.590.54
PV UFCF226.66224.17222.88215.19196.37180.14166.11153.95143.42134.30
Raw: 2,818.12
2,333.85
Raw: 3,117.75
1,596.09

Conservative Valuation

5-Year Horizon10-Year Horizon
UFCFUFCF
Enterprise Value3,419.133,459.29
(-) Net Debt996.68996.68
Equity Value2,422.452,462.61
(/) Shares Out65.3865.38
Fair Value$37.05$37.67
(-) Safety Margin75.58%75.58%
Buy Price$9.05$9.20
Current Price$61.98$61.98
Upside (to Buy Price)-85.40%-85.16%

Aggressive Projected Flows

WACC: 8.10%Terminal Growth: 2.92%
Metric2023202420252026202720282029203020312032TV (5y)TV (10y)
Discount Factor0.990.990.990.960.890.830.760.710.650.60
PV UFCF227.08224.58223.29217.01201.70188.45176.98167.07158.52151.18
Raw: 4,496.02
3,859.63
Raw: 4,974.04
2,892.94

Aggressive Valuation

5-Year Horizon10-Year Horizon
UFCFUFCF
Enterprise Value4,953.304,828.81
(-) Net Debt996.68996.68
Equity Value3,956.623,832.14
(/) Shares Out65.3865.38
Fair Value$60.52$58.62
(-) Safety Margin75.58%75.58%
Buy Price$14.78$14.31
Current Price$61.98$61.98
Upside (to Buy Price)-76.15%-76.90%

Reverse DCF: Market Implied Growth

Current Price$61.98
WACC Used9.1%
IMPLIED REVENUE GROWTH128.29%
Metric2027202820292030203120322033203420352036
Implied Revenue4,441.3810,139.2123,146.7952,841.75120,632.33275,391.30628,690.241,435,235.673,276,496.567,479,907.29
Constant Implied Growth128.29%128.29%128.29%128.29%128.29%128.29%128.29%128.29%128.29%128.29%
Implied Free Cash Flow0.441.012.315.2812.0627.5462.87143.52327.65747.99
Discount Factor0.990.810.740.680.620.570.520.480.440.40
Present Value of Implied FCF0.440.821.713.587.5015.6932.8368.71143.77300.84

Rolling Historical DCF (Backtest)

Valuation based on actual realized growth.
YearValuation DateActual PriceRealized Growth (5Y)Calculated Fair ValueValuation Delta
20172017-12-31$50.40-0.21%$16.85-66.57%
20162016-12-31$36.90-2.01%$19.17-48.06%
20152015-12-31$25.08-1.22%$27.8611.10%
20142014-12-31$28.390.97%$25.39-10.57%
20132013-12-31$34.220.51%$27.52-19.57%
20122012-12-31$22.051.24%$10.95-50.34%
20112011-12-31$18.830.66%$7.93-57.87%
20102010-12-31$19.863.48%$11.46-42.28%
20092009-12-31$12.359.45%$37.30202.01%
20082008-12-31$7.9112.04%$17.24117.98%
20072007-12-31$16.635.73%$14.18-14.73%
20062006-12-31$14.05-1.83%$-14.67-204.44%
20052005-12-31$14.29-18.49%$-422.24-3,054.78%
20042004-12-31$14.29-89.88%$-560.01-4,018.91%

Monte Carlo Simulation (1,000 Iterations)

Mean Fair Value
$47.12
Median
$45.62
10th Percentile
$37.19
90th Percentile
$59.15

Fair Value Distribution

$29.63 - $39.16
178
$39.16 - $48.68
471
$48.68 - $58.20
243
$58.20 - $67.73
93
$67.73 - $77.25
11
$77.25 - $86.78
1
$86.78 - $96.30
2
$96.30 - $105.83
0
$105.83 - $115.35
0
$115.35 - $124.88
0
$124.88 - $134.40
0
$134.40 - $143.93
0
$143.93 - $153.45
0
$153.45 - $162.98
0
$162.98 - $172.50
0
$172.50 - $182.03
0
$182.03 - $191.55
0
$191.55 - $201.08
0
$201.08 - $210.60
0
$210.60 - $220.13
1