DCF Studio

    ARGX.BR · BRU · Healthcare

    argenx SE

    Also onConsensus Drift

    Implied value per share

    EUR -350.53

    Market price

    EUR 871.40

    Implied upside

    -140.2%

    5-year forecast · Perpetuity growth terminal value · Mid-year discounting · Base case · USD model at 0.8704

    AdjustedReports in USD, trades in EUR. Modelled in USD, converted at the end.
    AdjustedFree cashflow is negative in at least one forecast year, so terminal value carries most of the valuation.
    NoteRisk-free rate is an assumption: USD assumption - no free live source available for this market.

    Current EV/EBITDA of 46.0x 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
    EUR -350.53-140.2%
    Exit multiple
    EUR -2725.79-412.8%
    Market price
    EUR 871.40

    Same forecast, different terminal treatment. Percentages vs price.

    Forecast Cashflows

    Reporting currency (USD). Outflows negative.

    -14442144295-72210721470FY26FY27FY28FY29FY30
    Nominal FCFFDiscounted to todayUSD
    LineFY26FY27FY28FY29FY30CAGR
    RevenueUSD 6.2bnUSD 9.3bnUSD 14.0bnUSD 21.0bnUSD 31.5bn+50.0%
    EBITUSD -2.9bnUSD -4.3bnUSD -6.5bnUSD -9.8bnUSD -14.7bn-50.0%
    NOPATUSD -2.2bnUSD -3.3bnUSD -4.9bnUSD -7.3bnUSD -11.0bn-50.0%
    Add depreciation & amortisationUSD 560.0mUSD 840.1mUSD 1.3bnUSD 1.9bnUSD 2.8bn+50.0%
    Less capital expenditureUSD -539.8mUSD -809.7mUSD -1.2bnUSD -1.8bnUSD -2.7bn+50.0%
    Less increase in working capitalUSD -700.6mUSD -1.1bnUSD -1.6bnUSD -2.4bnUSD -3.5bn+50.0%
    Free cashflow to firmUSD -2.9bnUSD -4.3bnUSD -6.4bnUSD -9.6bnUSD -14.4bn-50.0%
    Discount factor0.97020.91320.85960.80920.7617-
    Present valueUSD -2.8bnUSD -3.9bnUSD -5.5bnUSD -7.8bnUSD -11.0bn-41.2%
    Present Value Of The ForecastUSD -31.0bn

    Discount Rate

    Source shown per component. All overridable above.

    Risk-free rate4.20%USD assumption - no free live source available for this market (assumption)
    Equity risk premium6.50%Market assumption
    Beta0.313Reported -0.025, pulled toward 1.0 (Blume)
    Cost of equity6.24%Risk-free + beta x equity risk premium
    Cost of debt9.47%Interest expense / average total debt
    Market capitalisationUSD 54.2bn99.9% of capital
    Total debtUSD 47.2m0.1% of capital, book value as a proxy
    Tax rate25.0%Effective, capped at statutory
    WACC6.24%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 shareUSD -402.72

    0% of EV

    Terminal value, undiscounted
    USD 0.00
    Terminal value, discounted
    USD 0.00
    Enterprise value
    USD -31.0bn
    Less net debt
    USD -4.4bn
    Equity value
    USD -26.6bn

    Exit at 20.0x EBITDA

    Value per shareUSD -3131.65

    85% of EV

    Terminal value, undiscounted
    USD -236.6bn
    Terminal value, discounted
    USD -180.2bn
    Enterprise value
    USD -211.2bn
    Less net debt
    USD -4.4bn
    Equity value
    USD -206.8bn

    Sensitivity

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

    Long-run growth
    Discount rate1.50%2.00%2.50%3.00%3.50%
    4.24%-431.89-431.89-431.89-431.89-431.89
    5.24%-416.98-416.98-416.98-416.98-416.98
    6.24%-402.72-402.72-402.72-402.72-402.72
    7.24%-389.08-389.08-389.08-389.08-389.08
    8.24%-376.02-376.02-376.02-376.02-376.02

    Outlined: this model. Green text: above today's price of 1001.15. 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
    EBIT margin-46.5%8.6%+55.1pp
    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.