* Note: Prices are in Million (M) USD.
Description:
Veralto Corporation provides water supply services.
These criteria used Company's Cash, EBITDA and Debt balance to determines its fair value:
Cash : $1,559 M
Debt : $2,672 M
EBITDA : $1,306 M
Net Debt (Debt - Cash): $1,113 M
Since Net Debt is covered by EBITDA within 1 year, 3 points assigned.
This criteria used industry in which company operates:
Sector: Professional & commercial services
Industry: Pollution & treatment controls
Based on industry, 3 points assigned.
This criteria used Company's Price To Earning (P/E) Ratio to determines its fair value:
Forward PE Ratio: 29.01
Since Forward PE Ratio is between 25 - 35, 1 point assigned.
This criteria used Company's ability to convert Sales into free cash flow to determine fair value:
Using last 5 overlapping fiscal years (max 20).Average Free Cash Flow: $874 M
Average Revenue: $4,828 M
Revenue Converted To Free Cash Flow (%): 18.1%
Since Free Cash Flow (FCF) to Revenue percentage is greater than 15, 3 points assigned.
This criteria used company's growth potential to calculate its fair value:
Latest Revenue (2024-12-31): $5,193 M
Revenue 4 Years Ago (2020-12-31): $4,348 M
Last 5 Years Average Revenue Growth: 4%
Since Revenue Growth is between 0 - 5, 1 point assigned.
This criteria used Company's ability to buy back its own share:
Latest Share Count (2024-12-31): $250 M
Share Count 5 Years Ago (2020-12-31): $246 M
Company is not buying back its own shares, 0 points assigned.
This criteria used Company's dividend payout ratio to determine its fair value:
Next Year Earnings Per Share (EPS): $3.76
Trailing 12-Month Earnings Per Share (EPS): $3.55
Average Earnings Per Share (EPS): $3.66
Dividend Per Share (DPS): $0
Payout Ratio: 11%
Dividend Yield: 0%
Since company Payout Ratio is less than 50, 2 points assigned.
Since Dividend Yield is less than 1, 0 point assigned.
This criteria used Company's Return On Equity (ROE%) to determine its fair value:
Using last 4 valid ROE years (max 20).Average ROE: 38.6%
Since Average ROE is greater than 20, 5 points assigned.
This criteria used Company's current price to its 52 week low price to determines its fair value:
Current Price: $106
52-Week Low: $84
Threshold Price (15% Above 52-Week Low): $96
Since Current price is not within 15% threshold, 0 point assigned.
This criteria used Company's Market Cap to determines its fair value:
Market Capitalization: $26,620 M
Since Market Cap is between 10B - 100B, 2 points assigned.
% Exposure to Total Portfolio
Based on the market cap, we recommend do not exceed 3% exposure of Total Portfolio.
Value-Trade has assigned 20 points to above Veralto Corporation (VLTO) stock.
Heads up: One or more P/E inputs look exaggerated and may skew the blend.
• ROE Based PE
40.92 (>2× median)
Further research is recommended; please use your own due diligence.In such cases, multiplying earnings by the long-run average P/E typically gives a closer, more reliable fair value.
Rule of thumb: Last 2 Years Avg P/E (31.53)
× EPS ($3.66) = $115.40.
Last 2 Years Avg PE 31.53, Fair Value PE 15, Industry Based PE 18, Growth Based PE 3, RCFC Based PE 24.49, ROE Based PE 40.92, Risk-Free Anchored PE (25% MoS) 17.08. Based on these 7 values, average assigned is 21.43. Value-Trades has assined P/E value 21.43. Since an average (Current Year EPS + Next Year EPS) earning per share is $3.66.
The fair value of Veralto Corporation (VLTO) stock should be (21.43 x $3.66) = $78.44.
