DCF Studio

    AZM.MI · MIL · Financial Services

    Azimut Holding S.p.A.

    Also onConsensus Drift

    Implied value per share

    EUR 45.13

    Market price

    EUR 39.05

    Implied upside

    +15.6%

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

    Wrong toolThis is a financial. Banks and insurers report no meaningful operating income, and capex and working capital do not mean what a free-cashflow model assumes, so a DCF will misprice it. The model below runs on best-effort numbers - treat it as an illustration, not a valuation.
    AdjustedCapital expenditure runs at 3.9% of revenue against depreciation of 2.5%. A perpetuity has to be a steady state, so the terminal year uses maintenance capex at depreciation and then charges the reinvestment terminal growth requires (g/ROIC of NOPAT). The bridge is shown under Terminal Value.
    NoteRisk-free rate is an assumption: USD assumption - no free live source available for this market.

    Value Per Share

    Perpetuity growth
    EUR 45.13+15.6%
    Exit multiple
    EUR 43.82+12.2%
    Market price
    EUR 39.05

    Same forecast, different terminal treatment. Percentages vs price.

    Forecast Cashflows

    Reporting currency (EUR). Outflows negative.

    0m249m497mFY26FY27FY28FY29FY30
    Nominal FCFFDiscounted to todayEUR
    LineFY26FY27FY28FY29FY30CAGR
    RevenueEUR 1.5bnEUR 1.5bnEUR 1.5bnEUR 1.6bnEUR 1.6bn+3.1%
    EBITEUR 672.6mEUR 693.1mEUR 714.3mEUR 736.2mEUR 758.7m+3.1%
    NOPATEUR 504.4mEUR 519.9mEUR 535.8mEUR 552.1mEUR 569.0m+3.1%
    Add depreciation & amortisationEUR 36.5mEUR 37.6mEUR 38.8mEUR 40.0mEUR 41.2m+3.1%
    Less capital expenditureEUR -57.2mEUR -59.0mEUR -60.8mEUR -62.7mEUR -64.6m+3.1%
    Less increase in working capitalEUR -43.1mEUR -44.4mEUR -45.7mEUR -47.1mEUR -48.6m+3.1%
    Free cashflow to firmEUR 440.6mEUR 454.1mEUR 468.0mEUR 482.3mEUR 497.1m+3.1%
    Discount factor0.95090.85980.77740.70290.6355-
    Present valueEUR 419.0mEUR 390.4mEUR 363.8mEUR 339.0mEUR 315.9m-6.8%
    Present Value Of The ForecastEUR 1.8bn

    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
    Beta0.989Reported 0.984, pulled toward 1.0 (Blume)
    Cost of equity10.63%Risk-free + beta x equity risk premium
    Cost of debt6.20%Implied cost of debt of 22.3% is not a credible funding cost, so risk-free + 2bp is assumed instead. Interest expense and reported debt are measuring different things - common for banks, whose interest expense includes deposits that total debt excludes.
    Market capitalisationEUR 5.5bn99.5% of capital
    Total debtEUR 29.9m0.5% of capital, book value as a proxy
    Tax rate25.0%Effective, capped at statutory
    WACC10.60%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 shareEUR 45.13

    69% of EV

    Forecast FCFF, final year
    EUR 497.1m
    Capex at depreciation, working capital in reinvestment
    EUR 569.0m
    Less reinvestment at g/ROIC (11.0% of NOPAT)
    EUR -62.8m
    Capitalised
    EUR 506.2m
    ROIC (reported)
    22.6%
    Terminal value, undiscounted
    EUR 6.4bn
    Terminal value, discounted
    EUR 4.1bn
    Enterprise value
    EUR 5.9bn
    Less net debt
    EUR -494.0m
    Equity value
    EUR 6.4bn

    Exit at 7.6x EBITDA

    Value per shareEUR 43.82

    68% of EV

    Terminal value, undiscounted
    EUR 6.1bn
    Terminal value, discounted
    EUR 3.9bn
    Enterprise value
    EUR 5.7bn
    Less net debt
    EUR -494.0m
    Equity value
    EUR 6.2bn

    Spread between methods: 3%.

    Sensitivity

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

    Long-run growth
    Discount rate1.50%2.00%2.50%3.00%3.50%
    8.60%53.9656.0158.3961.1964.52
    9.60%47.7949.2150.8352.6854.82
    10.60%42.9843.9945.1346.4147.85
    11.60%39.1239.8740.6841.5942.60
    12.60%35.9736.5237.1237.7838.50

    Outlined: this model. Green text: above today's price of 39.05. 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 year3.1%-1.8%-4.9pp
    EBIT margin46.4%39.9%-6.5pp
    Discount rate10.6%12.0%+1.4pp
    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.