As of May 24, 2025, Babcock & Wilcox Enterprises Inc has a Discounted Cash Flow (DCF) derived fair value of $3.75 per share. With the current market price at $0.65, this represents a potential upside of 477.0%.
| Key Metrics | Value |
|---|---|
| DCF Fair Value (5-year) | $0.53 |
| DCF Fair Value (10-year) | $3.75 |
| Potential Upside (5-year) | -18.0% |
| Potential Upside (10-year) | 477.0% |
| Discount Rate (WACC) | 8.1% - 8.0% |
Revenue is projected to grow from $717 million in 12-2024 to $1476 million by 12-2034, representing a compound annual growth rate of approximately 7.5%.
| Fiscal Year | Revenue (USD millions) | Growth |
|---|---|---|
| 12-2024 | 717 | 28% |
| 12-2025 | 780 | 9% |
| 12-2026 | 853 | 9% |
| 12-2027 | 895 | 5% |
| 12-2028 | 960 | 7% |
| 12-2029 | 1044 | 9% |
| 12-2030 | 1115 | 7% |
| 12-2031 | 1215 | 9% |
| 12-2032 | 1304 | 7% |
| 12-2033 | 1369 | 5% |
| 12-2034 | 1476 | 8% |
Net profit margin is expected to improve from -10% in 12-2024 to -1% by 12-2034, driven by operational efficiency and economies of scale.
| Fiscal Year | Net Profit (USD millions) | Profit Margin |
|---|---|---|
| 12-2024 | (73) | -10% |
| 12-2025 | (43) | -6% |
| 12-2026 | (37) | -4% |
| 12-2027 | (29) | -3% |
| 12-2028 | (20) | -2% |
| 12-2029 | (10) | -1% |
| 12-2030 | (11) | -1% |
| 12-2031 | (12) | -1% |
| 12-2032 | (13) | -1% |
| 12-2033 | (14) | -1% |
| 12-2034 | (15) | -1% |
with a 5-year average of $10 million. Projected CapEx is expected to maintain at approximately 1% of revenue.
Depreciation is based on an average useful life of 5 years for capital assets.
| Fiscal Year | D&A (USD millions) |
|---|---|
| 12-2025 | 10 |
| 12-2026 | 11 |
| 12-2027 | 11 |
| 12-2028 | 11 |
| 12-2029 | 12 |
| 12-2030 | 12 |
Net working capital is expected to increase gradually, with projected changes affecting free cash flow.
| Components | Average Days |
|---|---|
| Days Receivables | 59 |
| Days Inventory | 64 |
| Days Payables | 65 |
| Fiscal Year | EBITDA | Tax | CapEx | Change in NWC | FCF |
|---|---|---|---|---|---|
| 9M/2025 | 4 | (8) | 7 | 2 | 2 |
| 2026 | 18 | (9) | 11 | 3 | 13 |
| 2027 | 31 | (7) | 11 | 15 | 12 |
| 2028 | 47 | (5) | 12 | 7 | 32 |
| 2029 | 65 | (3) | 13 | 12 | 42 |
| Valuation Method | Fair Price (USD) | Potential Upside |
|---|---|---|
| 5-Year DCF (Growth) | 0.53 | -18.0% |
| 10-Year DCF (Growth) | 3.75 | 477.0% |
| 5-Year DCF (EBITDA) | 0.00 | -100.0% |
| 10-Year DCF (EBITDA) | 1.50 | 130.5% |
Is Babcock & Wilcox Enterprises Inc (BW) a buy or a sell? Babcock & Wilcox Enterprises Inc is definitely a buy. Based on our DCF analysis, Babcock & Wilcox Enterprises Inc (BW) appears to be significantly undervalued with upside potential of 477.0%. The company's strong projected growth in revenue and profitability, coupled with consistent capital expenditure, supports our positive outlook on its intrinsic value.
Key investment drivers include:
Investors should consider a strong buy at the current market price of $0.65.