DCF Studio

    ALX.AX · ASX · Industrials

    Atlas Arteria Limited

    Also onShortfallConsensus DriftCrosscheck

    Implied value per share

    AUD -1.08

    Market price

    AUD 4.45

    Implied upside

    -124.2%

    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.
    AdjustedReported capital expenditure averages just 0.51% of revenue, which is too low to be the company's real investment - property trusts and similar structures invest through lines that are not reported as capex. Capex has been set to 50.64% of revenue so the forecast is not handed free growth. The accounts do not separate depreciation from amortisation, so the combined charge is used - if a large part of it is amortisation of an acquisition, the reported capex is probably right and this substitution is not. Override it if the reported figure is right.
    AdjustedFree cashflow is negative in at least one forecast year, so terminal value carries most of the valuation.

    Current EV/EBITDA of 163.5x sits outside a defensible 3-20x band, so the exit multiple is capped at 20.0x. A multiple that far out usually means EBITDA is the wrong denominator for this business.

    Value Per Share

    Perpetuity growth
    AUD -1.08-124.2%
    Exit multiple
    AUD -0.09-102.0%
    Market price
    AUD 4.45

    Same forecast, different terminal treatment. Percentages vs price.

    Forecast Cashflows

    Reporting currency (AUD). Outflows negative.

    -30530554-152652770FY26FY27FY28FY29FY30
    Nominal FCFFDiscounted to todayAUD
    LineFY26FY27FY28FY29FY30CAGR
    RevenueAUD 176.1mAUD 195.2mAUD 216.3mAUD 239.7mAUD 265.7m+10.8%
    EBITAUD -20.3mAUD -22.5mAUD -24.9mAUD -27.6mAUD -30.6m-10.8%
    NOPATAUD -20.0mAUD -22.2mAUD -24.6mAUD -27.2mAUD -30.2m-10.8%
    Add depreciation & amortisationAUD 89.2mAUD 98.8mAUD 109.5mAUD 121.4mAUD 134.6m+10.8%
    Less capital expenditureAUD -89.2mAUD -98.8mAUD -109.5mAUD -121.4mAUD -134.6m+10.8%
    Less increase in working capitalAUD -243.4kAUD -269.7kAUD -298.9kAUD -331.3kAUD -367.2k+10.8%
    Free cashflow to firmAUD -20.2mAUD -22.4mAUD -24.9mAUD -27.5mAUD -30.5m-10.8%
    Discount factor0.95970.88390.81410.74980.6906-
    Present valueAUD -19.4mAUD -19.8mAUD -20.2mAUD -20.7mAUD -21.1m-2.1%
    Present Value Of The ForecastAUD -101.2m

    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
    Beta0.681Reported 0.524, pulled toward 1.0 (Blume)
    Cost of equity9.43%Risk-free + beta x equity risk premium
    Cost of debt5.44%Interest expense / average total debt
    Market capitalisationAUD 6.5bn78.8% of capital
    Total debtAUD 1.7bn21.2% of capital, book value as a proxy
    Tax rate1.4%Effective, capped at statutory
    WACC8.57%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 -1.08

    0% of EV

    Terminal value, undiscounted
    AUD 0.00
    Terminal value, discounted
    AUD 0.00
    Enterprise value
    AUD -101.2m
    Less net debt
    AUD 1.5bn
    Equity value
    AUD -1.6bn

    Exit at 20.0x EBITDA

    Value per shareAUD -0.09

    108% of EV

    Terminal value, undiscounted
    AUD 2.1bn
    Terminal value, discounted
    AUD 1.4bn
    Enterprise value
    AUD 1.3bn
    Less net debt
    AUD 1.5bn
    Equity value
    AUD -129.1m

    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%
    6.57%-1.08-1.08-1.08-1.08-1.08
    7.57%-1.08-1.08-1.08-1.08-1.08
    8.57%-1.08-1.08-1.08-1.08-1.08
    9.57%-1.08-1.08-1.08-1.08-1.08
    10.57%-1.08-1.08-1.08-1.08-1.08

    Outlined: this model. Green text: above today's price of 4.45. Shading: distance from this model's own value.

    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.