Using an unlevered Free Cash Flow to Firm (FCFF) model, we project Twin Disc, Incorporated's cash flows over 5 years with line-by-line expense modeling. Revenue is projected revenue growing from 8.8% to 11.7% annually, with expenses (COGS, SG&A, R&D) held at historical ratios. Depreciation is computed from a vintage matrix based on a 5-year useful life. Working capital is modeled using historical turnover days (DSO 67, DPO 61, DIO 241). At a 7.7% WACC with mid-year discounting, the terminal value (221% of enterprise value) is derived by applying the industry peer median EV/EBITDA multiple of 8.5x to Year 6 EBITDA. After subtracting net debt, the equity value implies a fair price of $2.90 per share, suggesting TWIN is overvalued by 84.3% at the current price of $18.50.
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| 2026 | 2027 | 2028 | 2029 | 2030 | Terminal | |
|---|---|---|---|---|---|---|
| Profit Before Tax | 6 | 7 | 8 | 9 | 10 | 10 |
| (−) Net Interest | 3 | 3 | 4 | 4 | 5 | 5 |
| (+) D&A | 8 | 9 | 11 | 12 | 13 | 13 |
| EBITDA | 18 | 20 | 22 | 24 | 27 | 28 |
| (−) Tax | 3 | 3 | 4 | 4 | 5 | — |
| (−) CapEx | 11 | 11 | 13 | 14 | 16 | — |
| (−) ΔWC | 30 | 17 | 26 | 29 | 32 | — |
| Free Cash Flow (FCF) | -26 | -12 | -20 | -23 | -26 | — |
| Peers' EBITDA Multiple | 8.5x | |||||
| Terminal Value | 236 | |||||
| WACC / Discount Rate | 7.74% | |||||
| Timing of FCF (mid year) | 0.5 | 1.5 | 2.5 | 3.5 | 4.5 | 5 |
| Present Value of FCF | -25 | -11 | -17 | -18 | -18 | 162 |
| Enterprise Value | 73 | |||||
| Projection Period | -89 | -121.2% | ||||
| Terminal Value | 162 | 221.2% | ||||
| (−) Current Net Debt | 33 | |||||
| Equity Value | 40 | |||||
| (÷) Outstanding Shares | 14M | |||||
| Fair Price | $3 | -84.3% | ||||
| WACC \ EV/EBITDA Exit Multiple | 4.5x | 6.5x | 8.5x | 10.5x | 12.5x |
|---|---|---|---|---|---|
| 5.7% | $0 | $1 | $4 | $7 | $10 |
| 6.7% | $0 | $0 | $3 | $6 | $9 |
| 7.7% | $0 | $0 | $3 | $6 | $8 |
| 8.7% | $0 | $0 | $3 | $5 | $8 |
| 9.7% | $0 | $0 | $2 | $5 | $7 |
Current price: $18.50. Green = undervalued, Red = overvalued.
Based on default parameters
Using the industry peer median EV/EBITDA multiple (trailing + forward), Twin Disc, Incorporated (TWIN) has a fair value of $8.02 based on 5 comparable companies in the Industrial - Machinery industry.
USD in millions except Fair Price. Subject company highlighted.
| Mkt Cap ($M) | Trailing EV/EBITDA | Forward EV/EBITDA | |
|---|---|---|---|
| Twin Disc, IncorporatedTWIN | 256 | 15.0x | 19.0x |
| Park-Ohio Holdings Corp. | 346 | 8.5x | 8.2x |
| Omega Flex, Inc. | 328 | 15.3x | 10.8x |
| Tredegar Corporation | 285 | 6.5x | 5.4x |
| Perma-Pipe International Holdings, Inc. | 247 | 13.0x | 9.8x |
| Proficient Auto Logistics, Inc. Common Stock | 191 | 4.9x | 5.5x |
| Industry Median | 8.5x | 8.2x | |
| (*) EBITDA | 19 | 15 | |
| = Enterprise Value | 164 | 125 | |
| (-) Net Debt | 33 | 33 | |
| Equity Value | 131 | 91 | |
| (/) Outstanding shares | 14 | 14 | |
| Fair Price | $9 | $7 | |
Using the industry peer median EV/Revenue multiple (trailing + forward), Twin Disc, Incorporated (TWIN) has a fair value of $12.33 based on 7 comparable companies in the Industrial - Machinery industry.
USD in millions except Fair Price. Subject company highlighted.
| Mkt Cap ($M) | Trailing EV/Revenue | Forward EV/Revenue | |
|---|---|---|---|
| Twin Disc, IncorporatedTWIN | 256 | 0.8x | 1.1x |
| Park-Ohio Holdings Corp. | 346 | 0.6x | 0.6x |
| Omega Flex, Inc. | 328 | 2.8x | 2.0x |
| Tredegar Corporation | 285 | 0.5x | 0.4x |
| Perma-Pipe International Holdings, Inc. | 247 | 1.7x | 1.3x |
| Perma-Fix Environmental Services, Inc. | 213 | 3.3x | 2.3x |
| Proficient Auto Logistics, Inc. Common Stock | 191 | 0.6x | 0.7x |
| Southland Holdings, Inc. | 74 | 0.4x | 0.3x |
| Industry Median | 0.6x | 0.7x | |
| (*) Revenue | 341 | 269 | |
| = Enterprise Value | 218 | 190 | |
| (-) Net Debt | 33 | 33 | |
| Equity Value | 185 | 157 | |
| (/) Outstanding shares | 14 | 14 | |
| Fair Price | $13 | $11 | |
Using the Earnings Power Value framework with a WACC of 7.7% and normalized earnings of $6.3M, the company has a fair value of $3.45 per share. The EPV range is $2.50 – $4.85 based on WACC sensitivity (6.2% – 9.2%).
| Low | Selected | High | |
|---|---|---|---|
| Normalized Earnings | 6 | 6 | 6 |
| (/) WACC | 9.2% | 7.7% | 6.2% |
| Enterprise Value | 68 | 81 | 100 |
| (-) Net debt | 33 | 33 | 33 |
| Equity Value | 35 | 48 | 67 |
| (/) Outstanding shares | 14 | 14 | 14 |
| Fair Price | $2.50 | $3.45 | $4.85 |
Disclaimer: Sweet Value Lab provides estimated intrinsic values for informational purposes only. This is not financial advice. All models rely on assumptions that may not reflect future performance. Always do your own research before making investment decisions.