ABC Technologies Holdings (TSX:ABCT) - Share price, News & Analysis

Q: What is the Fair Price of ABCT when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

ABCT (CA$5.96) is trading below our estimate of [[fair value]] (CA$7.17)

ABCT fundamental analysis
Snowflake Score
Valuation	1/6
Future Growth	5/6
Past Performance	0/6
Financial Health	1/6
Dividends	1/6

ABCT Stock Overview

Rewards

Trading at 16.9% below our estimate of its fair value

Earnings are forecast to grow 103.67% per year

Risk Analysis

Debt is not well covered by operating cash flow

Dividend of 2.51% is not well covered by earnings or forecast to be in the next 3 years

Shareholders have been substantially diluted in the past year

ABC Technologies Holdings Competitors

Martinrea International

TSX:MRE

CA$667.9m

Exco Technologies

TSX:XTC

CA$310.9m

Linamar

TSX:LNR

CA$3.5b

Magna International

TSX:MG

CA$20.7b

Price History & Performance

Summary of all time highs, changes and price drops for ABC Technologies Holdings
Historical stock prices
Current Share Price	CA$5.96
52 Week High	CA$9.22
52 Week Low	CA$5.32
Beta	0
1 Month Change	1.53%
3 Month Change	-4.49%
1 Year Change	-32.73%
3 Year Change	n/a
5 Year Change	n/a
Change since IPO	-39.49%

Shareholder Returns

	ABCT	CA Auto Components	CA Market
7D	-0.3%	-4.8%	-0.8%
1Y	-32.7%	-37.1%	-5.0%

Return vs Industry: ABCT exceeded the Canadian Auto Components industry which returned -37.1% over the past year.

Return vs Market: ABCT underperformed the Canadian Market which returned -5% over the past year.

Price Volatility

Is ABCT's price volatile compared to industry and market?
ABCT volatility
ABCT Average Weekly Movement	8.5%
Auto Components Industry Average Movement	5.7%
Market Average Movement	10.1%
10% most volatile stocks in CA Market	17.4%
10% least volatile stocks in CA Market	4.4%

Stable Share Price: ABCT is not significantly more volatile than the rest of Canadian stocks over the past 3 months, typically moving +/- 9% a week.

Volatility Over Time: ABCT's weekly volatility (9%) has been stable over the past year.

About the Company

Founded	Employees	CEO	Website
1950	6,150	Todd Sheppelman	https://abctechnologies.com

ABC Technologies Holdings Inc. engages in manufacturing, designing, engineering, material compounding, machine tooling, and equipment building of plastics and light weighting products for the automotive industry in Canada, the United States, Mexico, and internationally. It offers interior systems, including floor consoles, cargo management systems, interior trims, seat backs, load floor/deck boards, knee/sides, and door panels; exterior systems, such as spoilers, running boards, bumper systems, body side moldings, rocker panels, cladding, cargo management systems, bed extenders, and roof ditch moldings; and HVAC distribution systems comprising defrosters, I/P and floor products, auxiliary products, battery cooling products, brake cooling ducts, air guides, aspirators, and module components. The company also provides air induction systems that consists of integrated air induction systems, turbo ducts, air intake ducts, resonators, air cleaner housings, clean/dirty air ducts, and air box filters; fluid management systems, such as windshield washer reservoir assemblies, coolant overflow reservoir assemblies, surge tank assemblies, power steering reservoirs, and battery trays; and flexible products, including CVJ boots, rack pinion boots, air demister hoses, prop shaft boots, suspension dust covers, and steering column covers.

ABC Technologies Holdings Fundamentals Summary

How do ABC Technologies Holdings's earnings and revenue compare to its market cap?
ABCT fundamental statistics
Market Cap	US$533.38m
Earnings (TTM)	-US$62.68m
Revenue (TTM)	US$885.82m

0.6x

P/S Ratio

-8.5x

P/E Ratio

Is ABCT overvalued?

See Fair Value and valuation analysis

Earnings & Revenue

Key profitability statistics from the latest earnings report
ABCT income statement (TTM)
Revenue	US$885.82m
Cost of Revenue	US$808.79m
Gross Profit	US$77.04m
Other Expenses	US$139.72m
Earnings	-US$62.68m

Last Reported Earnings

Mar 31, 2022

Next Earnings Date

n/a

Earnings per share (EPS)	-0.54
Gross Margin	8.70%
Net Profit Margin	-7.08%
Debt/Equity Ratio	99.7%

How did ABCT perform over the long term?

See historical performance and comparison

Dividends

2.5%

Current Dividend Yield

-12%

Payout Ratio

We’ve recently updated our valuation analysis.

Valuation

Is ABCT undervalued compared to its fair value, analyst forecasts and its price relative to the market?

Valuation Score

1/6

Valuation Score 1/6

Price-To-Sales vs Peers
Price-To-Sales vs Industry
Price-To-Sales vs Fair Ratio
Below Fair Value
Significantly Below Fair Value
PEG Ratio

Key Valuation Metric

Which metric is best to use when looking at relative valuation for ABCT?

Other financial metrics that can be useful for relative valuation.

The above table shows the n/a ratio for ABCT. This is calculated by dividing ABCT's market cap by their current preferred multiple.
What is ABCT's n/a Ratio?
n/a Ratio	0x
n/a	n/a
Market Cap	US$533.38m

ABCT key valuation metrics and ratios. From Price to Earnings, Price to Sales and Price to Book to Price to Earnings Growth Ratio, Enterprise Value and EBITDA.
Key Statistics
Enterprise Value/Revenue	1.2x
Enterprise Value/EBITDA	52x
PEG Ratio	n/a

Price to Sales Ratio vs Peers

How does ABCT's PS Ratio compare to its peers?

ABCT PS Ratio vs Peers

The above table shows the PS ratio for ABCT vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
Company	PS	Estimated Growth	Market Cap
Peer Average	0.5x
MRE Martinrea International	0.2x	7.6%	CA$667.9m
XTC Exco Technologies	0.7x	14.6%	CA$310.9m
LNR Linamar	0.5x	10.2%	CA$3.5b
MG Magna International	0.4x	6.3%	CA$20.7b
ABCT ABC Technologies Holdings	0.6x	20.9%	CA$688.9m

Forward PS

Price-To-Sales vs Peers: ABCT is expensive based on its Price-To-Sales Ratio (0.6x) compared to the peer average (0.5x).

Price to Earnings Ratio vs Industry

How does ABCT's PE Ratio compare vs other companies in the North American Auto Components Industry?

Price-To-Sales vs Industry: ABCT is expensive based on its Price-To-Sales Ratio (0.6x) compared to the Canadian Auto Components industry average (0.6x)

Price to Sales Ratio vs Fair Ratio

What is ABCT's PS Ratio compared to its Fair PS Ratio? This is the expected PS Ratio taking into account the company's forecast earnings growth, profit margins and other risk factors.

ABCT PS Ratio vs Fair Ratio.
Fair Ratio
Current PS Ratio	0.6x
Fair PS Ratio	0.5x

Price-To-Sales vs Fair Ratio: ABCT is expensive based on its Price-To-Sales Ratio (0.6x) compared to the estimated Fair Price-To-Sales Ratio (0.5x).

Share Price vs Fair Value

What is the Fair Price of ABCT when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

Below Fair Value: ABCT (CA$5.96) is trading below our estimate of fair value (CA$7.17)

Significantly Below Fair Value: ABCT is trading below fair value, but not by a significant amount.

Price to Earnings Growth Ratio

PEG Ratio: Insufficient data to calculate ABCT's PEG Ratio to determine if it is good value.

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Future Growth

How is ABC Technologies Holdings forecast to perform in the next 1 to 3 years based on estimates from 6 analysts?

Future Growth Score

5/6

Future Growth Score 5/6

Earnings vs Savings Rate
Earnings vs Market
High Growth Earnings
Revenue vs Market
High Growth Revenue
Future ROE

103.7%

Forecasted annual earnings growth

Earnings and Revenue Growth Forecasts

Analyst Future Growth Forecasts

Earnings vs Savings Rate: ABCT is forecast to become profitable over the next 3 years, which is considered faster growth than the savings rate (1.6%).

Earnings vs Market: ABCT is forecast to become profitable over the next 3 years, which is considered above average market growth.

High Growth Earnings: ABCT is expected to become profitable in the next 3 years.

Revenue vs Market: ABCT's revenue (20.9% per year) is forecast to grow faster than the Canadian market (6.5% per year).

High Growth Revenue: ABCT's revenue (20.9% per year) is forecast to grow faster than 20% per year.

Earnings per Share Growth Forecasts

Future Return on Equity

Future ROE: ABCT's Return on Equity is forecast to be low in 3 years time (7.6%).

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Past Performance

How has ABC Technologies Holdings performed over the past 5 years?

Past Performance Score

0/6

Past Performance Score 0/6

Quality Earnings
Growing Profit Margin
Earnings Trend
Accelerating Growth
Earnings vs Industry
High ROE

-72.9%

Historical annual earnings growth

Earnings and Revenue History

Quality Earnings: ABCT is currently unprofitable.

Growing Profit Margin: ABCT is currently unprofitable.

Past Earnings Growth Analysis

Earnings Trend: ABCT is unprofitable, and losses have increased over the past 5 years at a rate of 72.9% per year.

Accelerating Growth: Unable to compare ABCT's earnings growth over the past year to its 5-year average as it is currently unprofitable

Earnings vs Industry: ABCT is unprofitable, making it difficult to compare its past year earnings growth to the Auto Components industry (9.5%).

Return on Equity

High ROE: ABCT has a negative Return on Equity (-15.61%), as it is currently unprofitable.

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Financial Health

How is ABC Technologies Holdings's financial position?

Financial Health Score

1/6

Financial Health Score 1/6

Short Term Liabilities
Long Term Liabilities
Debt Level
Reducing Debt
Debt Coverage
Interest Coverage

Financial Position Analysis

Short Term Liabilities: ABCT's short term assets ($396.8M) exceed its short term liabilities ($285.6M).

Long Term Liabilities: ABCT's short term assets ($396.8M) do not cover its long term liabilities ($610.7M).

Debt to Equity History and Analysis

Debt Level: ABCT's net debt to equity ratio (91.4%) is considered high.

Reducing Debt: Insufficient data to determine if ABCT's debt to equity ratio has reduced over the past 5 years.

Debt Coverage: ABCT's operating cash flow is negative, therefore debt is not well covered.

Interest Coverage: Insufficient data to determine if ABCT's interest payments on its debt are well covered by EBIT.

Balance Sheet

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Dividend

What is ABC Technologies Holdings's current dividend yield, its reliability and sustainability?

Dividend Score

1/6

Dividend Score 1/6

Notable Dividend
High Dividend
Stable Dividend
Growing Dividend
Earnings Coverage
Future Dividend Coverage

2.51%

Current Dividend Yield

Dividend Yield vs Market

Notable Dividend: ABCT's dividend (2.51%) is higher than the bottom 25% of dividend payers in the Canadian market (2.02%).

High Dividend: ABCT's dividend (2.51%) is low compared to the top 25% of dividend payers in the Canadian market (5.4%).

Stability and Growth of Payments

Stable Dividend: Too early to tell whether ABCT's dividend payments have been stable as they only just started paying a dividend.

Growing Dividend: Too early to tell if ABCT's dividend payments are increasing as they only just started paying a dividend.

Earnings Payout to Shareholders

Earnings Coverage: ABCT is paying a dividend but the company is unprofitable.

Cash Payout to Shareholders

Cash Flow Coverage: ABCT is paying a dividend but the company has no free cash flows.

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Management

How experienced are the management team and are they aligned to shareholders interests?

4.9yrs

Average management tenure

CEO

Todd Sheppelman

4.75yrs

Tenure

US$8,134,092

Compensation

Mr. Todd P. Sheppelman serves as Director at ABC Technologies Holdings Inc. since February 10, 2021 and serves as its Chief Executive Officer since October 2017 and President. He serves as President and Ch...

CEO Compensation Analysis

Compensation vs Market: Todd's total compensation ($USD8.13M) is above average for companies of similar size in the Canadian market ($USD1.29M).

Compensation vs Earnings: Insufficient data to compare Todd's compensation with company performance.

Leadership Team

Experienced Management: ABCT's management team is considered experienced (4.9 years average tenure).

Board Members

Experienced Board: ABCT's board of directors are not considered experienced ( 1.1 years average tenure), which suggests a new board.

Ownership

Who are the major shareholders and have insiders been buying or selling?

Insider Trading Volume

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.

Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have been substantially diluted in the past year, with total shares outstanding growing by 120.1%.

Data	Last Updated (UTC time)
Company Analysis	2022/07/03 00:00
End of Day Share Price	2022/06/30 00:00
Earnings	2022/03/31
Annual Earnings	2021/06/30