CTS Corporation designs, manufactures, and sells a range of sensors, electronic components, and actuators primarily to original equipment manufacturers for the transportation, communications, defense and aerospace, medical, industrial, and information technology markets. The company was founded in 1896 and is based in Elkhart, Indiana.
CTS Price Forecast Based on DCF Valuation
DCF Fair Value Target:
The table below illustrates the output of a discounted cash flow forecast using a variety of scenarios for Cts Corp. To summarize, we found that Cts Corp ranked in the 47th percentile in terms of potential gain offered. We should note, though, that all scenearios modelled for this stock suggest it is overvalued. As for the metrics that stood out in our discounted cash flow analysis of Cts Corp, consider:
CTS's estimated cost of debt, based largely on its market capitalization and its interest coverage ratio, is 2%; for context, that number is higher than 32.4% of tickers in our DCF set.
Cts Corp's interest coverage rate -- a measure of gross earnings relative to interest payments -- comes in at 12.07. This coverage rate is greater than that of 80.11% of stocks we're observing for the purpose of forecasting via discounted cash flows.
The weighted average cost of capital for the company is 8. This value is greater than merely 19.63% stocks in the Technology sector that generate free cash flow.
Terminal Growth Rate in Free Cash Flow
Return Relative to Current Share Price
OSIS, CLGX, FISV, SWI, and UEIC can be thought of as valuation peers to CTS, in the sense that they are in the Technology sector and have a similar price forecast based on DCF valuation.
At this time, I would like to turn the conference over to Kieran O'Sullivan. Additional information regarding these risks and uncertainties is contained in the press release issued today, and more information can be found in the Company's SEC filings.
Adapting to New Market ConditionsLISLE, Ill., July 31, 2020 (GLOBE NEWSWIRE) -- CTS Corporation (NYSE: CTS) today announced second quarter 2020 results. * Sales were $84.2 million, down 30% year-over-year. Sales to transportation customers declined 53%, and sales to other end markets grew 14%. Excluding $5.4 million in sales from the QTI acquisition, sales to other end markets grew 1%. * Net earnings were $4.9 million or $0.15 per diluted share versus $11.9 million or $0.36 last year. * Adjusted diluted EPS was $0.16. * Free cash flow was $9.1 million, and at quarter-end, we were net cash positive. * New business wins were $105 million.“I am grateful to our teams around the globe for their resilience and care for our customers and partners in this unprecedented downturn. We are ada...