DCF Studio

    ALQ.AX · ASX · Industrials

    ALS Limited

    Also onShortfallConsensus DriftCrosscheck

    Implied value per share

    AUD 9.99

    Market price

    AUD 21.37

    Implied upside

    -53.3%

    5-year forecast · Perpetuity growth terminal value · Mid-year discounting · Base case

    AdjustedSome line items were not reported and have been derived. Each one is labelled in the workings below.

    Value Per Share

    Perpetuity growth
    AUD 9.99-53.3%
    Exit multiple
    AUD 30.13+41.0%
    Market price
    AUD 21.37

    Same forecast, different terminal treatment. Percentages vs price.

    Forecast Cashflows

    Reporting currency (AUD). Outflows negative.

    0m366m732mFY27FY28FY29FY30FY31
    Nominal FCFFDiscounted to todayAUD
    LineFY27FY28FY29FY30FY31CAGR
    RevenueAUD 3.8bnAUD 4.3bnAUD 4.8bnAUD 5.5bnAUD 6.2bn+13.4%
    EBITAUD 614.7mAUD 696.9mAUD 790.0mAUD 895.5mAUD 1.0bn+13.4%
    NOPATAUD 434.8mAUD 492.8mAUD 558.7mAUD 633.3mAUD 717.9m+13.4%
    Add depreciation & amortisationAUD 274.4mAUD 311.1mAUD 352.7mAUD 399.8mAUD 453.2m+13.4%
    Less capital expenditureAUD -244.6mAUD -277.3mAUD -314.3mAUD -356.3mAUD -403.9m+13.4%
    Less increase in working capitalAUD -21.1mAUD -23.9mAUD -27.1mAUD -30.8mAUD -34.9m+13.4%
    Free cashflow to firmAUD 443.5mAUD 502.8mAUD 569.9mAUD 646.1mAUD 732.4m+13.4%
    Discount factor0.94950.85610.77190.69600.6275-
    Present valueAUD 421.1mAUD 430.4mAUD 439.9mAUD 449.6mAUD 459.6m+2.2%
    Present Value Of The ForecastAUD 2.2bn

    Discount Rate

    Source shown per component. All overridable above.

    Risk-free rate5.35%Australian Government 10-year (RBA F2)
    Equity risk premium6.00%Market assumption
    Beta1.099Reported 1.148, pulled toward 1.0 (Blume)
    Cost of equity11.94%Risk-free + beta x equity risk premium
    Cost of debt5.35%Floored at the risk-free rate (implied cost of debt was lower)
    Market capitalisationAUD 10.8bn87.3% of capital
    Total debtAUD 1.6bn12.7% of capital, book value as a proxy
    Tax rate29.3%Effective, capped at statutory
    WACC10.91%E/V x Re + D/V x Rd x (1 - t)

    Terminal Value

    Perpetuity growth is intrinsic. The exit multiple defaults to the company's current EV/EBITDA, so it answers a different question - what the shares are worth if today's rating holds and EBITDA grows as forecast.

    Perpetuity growth at 2.50%

    Value per shareAUD 9.99

    66% of EV

    Forecast FCFF, final year
    AUD 732.4m
    Capex at depreciation, working capital in reinvestment
    AUD 717.9m
    Less reinvestment at g/ROIC (22.1% of NOPAT)
    AUD -159.0m
    Capitalised
    AUD 558.9m
    ROIC (reported)
    11.3%
    Terminal value, undiscounted
    AUD 6.8bn
    Terminal value, discounted
    AUD 4.3bn
    Enterprise value
    AUD 6.5bn
    Less net debt
    AUD 1.4bn
    Equity value
    AUD 5.1bn

    Exit at 15.7x EBITDA

    Value per shareAUD 30.13

    87% of EV

    Terminal value, undiscounted
    AUD 23.0bn
    Terminal value, discounted
    AUD 14.5bn
    Enterprise value
    AUD 16.7bn
    Less net debt
    AUD 1.4bn
    Equity value
    AUD 15.2bn

    Spread between methods: 100%.

    Sensitivity

    Value per share (AUD) by discount rate and long-run growth.

    Long-run growth
    Discount rate1.50%2.00%2.50%3.00%3.50%
    8.91%13.2313.4913.7814.1214.51
    9.91%11.3511.4811.6311.7911.97
    10.91%9.879.939.9910.0510.12
    11.91%8.738.778.808.848.87
    12.91%7.817.847.877.907.93

    Outlined: this model. Green text: above today's price of 21.37. Shading: distance from this model's own value.

    Priced In

    What each input would have to be to justify the current price, one at a time.

    InputModelImpliedGap
    Revenue growth, every year13.4%31.2%+17.9pp
    EBIT margin16.3%31.0%+14.6pp
    Discount rate10.9%6.8%-4.1pp
    Download as Excel

    Live formulas, not pasted numbers - edit a driver and the workbook reprices.

    Yahoo Finance and RBA data. General information, not advice. Methodology.