Powell Industries engineers packaged solutions and systems for the management, control and distribution of electrical energy. Powell markets include large industrial customers such as utilities, oil and gas producers, refineries, petrochemical plants, pulp and paper producers, mining operations and commuter railways. The company was founded in 1947 and is based in Houston, Texas.
POWL Price Forecast Based on DCF Valuation
DCF Fair Value Target:
Below please find a table outlining a discounted cash flow forecast for POWL, in which we model out valuation assuming a variety of terminal growth rates. To summarize, we found that Powell Industries Inc ranked in the 95th percentile in terms of potential gain offered. Specifically, our DCF analysis implies the stock is trading below its fair value by an estimated 6424.5%. The most interesting components of our discounted cash flow analysis for Powell Industries Inc ended up being:
Interest coverage, a measure of earnings relative to interest payments, is 100.7; that's higher than 96.93% of US stocks in the Industrials sector that have positive free cash flow.
The business' balance sheet suggests that 2% of the company's capital is sourced from debt; this is greater than merely 8.99% of the free cash flow producing stocks we're observing.
POWL'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 49.01% of tickers in our DCF set.
Terminal Growth Rate in Free Cash Flow
Return Relative to Current Share Price
ESOA, SNDR, PWR, ASTE, and CAR can be thought of as valuation peers to POWL, in the sense that they are in the Industrials sector and have a similar price forecast based on DCF valuation.
Powell Industries, Inc. (NASDAQ: POWL), a leading supplier of custom engineered solutions for the management, control and distribution of electrical energy, today announced results for the fiscal 2020 third quarter ended June 30, 2020.