How to do financial valuation of Wind Turbine companies

susanchang's picture
Rank: Chimp | 5

Any one has ideas on how to do valuation of wind turbine companies(e.g. Vestas VWS.DC)?
Company annual report gives guideline such as "Total MW deliveries for 2012 is 7,000MW~8,000MW." But how do I translate "MW deliveries" to "$ revenue"?
- Do I get Average Selling Price by diving Revenue$ with MW deliveries of past years?
- Doesn't wind turbine companies produce turbines (the machine)? why use MW deliveries as measure of sales/revenue? shouldn't we look at number of turbine produced to estimate their Revenue? Just couldn't understand the relation of MW deliveries and Revenue($). Hope someone can share some insight. Thanks!

Comments (6)

Mar 2, 2012

Download their 10-K/European equivalent. Read the notes.

Mar 2, 2012

Wind Turbine companies produce electricity lol. That's why you are seeing MW. To calculate revenue you would need the amount of MWh that facility produces and multiply that by the amount of hours in a year to get annual revenue. Based on your post, I would read a primer on the industry before attempting to value the company as it can get pretty complex.

'We're bigger than U.S. Steel"

Mar 2, 2012
Wasserstag526:

Wind Turbine companies produce electricity lol. That's why you are seeing MW. To calculate revenue you would need the amount of MWh that facility produces and multiply that by the amount of hours in a year and you would also need some type of average of electricity prices in that area to get annual revenue. Based on your post, I would read a primer on the industry before attempting to value the company as it can get pretty complex.

'We're bigger than U.S. Steel"

Mar 2, 2012

judging by the fact that you mentioned 7,000MW, i will assume you are referring to the company that produces the turbines and does not own the wind farms. you should be able to use past data to figure out how much they sell turbines for on a MW basis

Nov 24, 2012

your answers are somewhat misguided. a wind turbine MANUFACTURER does not produce the electricty, they just assemble the parts that go into the naceclle, etc.... you'd value them like any other hard asset manufacturer (e.g. ev/ebitda) but yes, you do start with a selling price based on MWh.

Nov 25, 2012
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