What is Twin Disc Inc worth?
With the base-case assumptions below, a discounted cash flow model on Twin Disc Inc's reported free cash flow gives $16.26 per share.
Inputs from the filings
Three sets of assumptions
| Case | Growth yrs 1-5 | Discount rate | Value per share | Value vs price |
|---|---|---|---|---|
| Bear | 7.0% | 10.0% | $9.72 | - |
| Base | 12.0% | 9.0% | $16.26 | - |
| Bull | 17.0% | 8.0% | $29.27 | - |
Sensitivity: base case value per share
| 1.5% | 2.0% | 2.5% | 3.0% | 3.5% | |
|---|---|---|---|---|---|
| 7.0% | $21.23 | $22.77 | $24.66 | $27.01 | $30.03 |
| 8.0% | $17.50 | $18.50 | $19.68 | $21.10 | $22.83 |
| 9.0% | $14.79 | $15.47 | $16.26 | $17.17 | $18.26 |
| 10.0% | $12.72 | $13.21 | $13.76 | $14.39 | $15.11 |
| 11.0% | $11.10 | $11.46 | $11.86 | $12.30 | $12.81 |
Where the presets come from
Base: years 1 to 5 grow at Twin Disc Inc's revenue growth rate over the last 5 fiscal years (11.8% a year), held between -5% and 15%. Years 6 to 10 grow halfway between that and the long-run rate of 2.5%. Future cash is discounted at 9% a year.
Bear: 5 points less growth, 2% long-run growth, 10% discount rate. Bull: 5 points more growth (at most 25%), 3% long-run growth, 8% discount rate.
Value per share = (present value of 10 years of free cash flow + present value of everything after + cash - debt) / diluted shares.
This is a model run on assumptions, not a recommendation or a price target. Small changes in the discount rate or growth move the result a lot, as the table above shows. Change them yourself in the calculator.
Adjust the assumptions
Move the sliders for growth, long-run growth and discount rate, or switch to average free cash flow, and see the value per share change.
Adjust the assumptions