CDA.AX · ASX · Technology
Codan Limited
Also onShortfallConsensus DriftCrosscheck
Implied value per share
AUD 5.16
Market price
AUD 50.10
Implied upside
-89.7%
5-year forecast · Perpetuity growth terminal value · Mid-year discounting · Base case
Current EV/EBITDA of 63.1x 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
Same forecast, different terminal treatment. Percentages vs price.
Forecast Cashflows
Reporting currency (AUD). Outflows negative.
| Line | FY26 | FY27 | FY28 | FY29 | FY30 | CAGR |
|---|---|---|---|---|---|---|
| Revenue | AUD 741.8m | AUD 816.3m | AUD 898.1m | AUD 988.2m | AUD 1.1bn | +10.0% |
| EBIT | AUD 124.5m | AUD 137.0m | AUD 150.7m | AUD 165.8m | AUD 182.4m | +10.0% |
| NOPAT | AUD 96.5m | AUD 106.2m | AUD 116.9m | AUD 128.6m | AUD 141.5m | +10.0% |
| Add depreciation & amortisation | AUD 42.3m | AUD 46.5m | AUD 51.2m | AUD 56.3m | AUD 62.0m | +10.0% |
| Less capital expenditure | AUD -44.6m | AUD -49.0m | AUD -54.0m | AUD -59.4m | AUD -65.3m | +10.0% |
| Less increase in working capital | AUD -4.1m | AUD -4.5m | AUD -4.9m | AUD -5.4m | AUD -6.0m | +10.0% |
| Free cashflow to firm | AUD 90.2m | AUD 99.2m | AUD 109.1m | AUD 120.1m | AUD 132.1m | +10.0% |
| Discount factor | 0.9414 | 0.8344 | 0.7395 | 0.6554 | 0.5809 | - |
| Present value | AUD 84.9m | AUD 82.8m | AUD 80.7m | AUD 78.7m | AUD 76.8m | -2.5% |
| Present Value Of The Forecast | AUD 403.8m | |||||
Discount Rate
Source shown per component. All overridable above.
| Risk-free rate | 5.35% | Australian Government 10-year (RBA F2) |
| Equity risk premium | 6.00% | Market assumption |
| Beta | 1.268 | Reported 1.400, pulled toward 1.0 (Blume) |
| Cost of equity | 12.96% | Risk-free + beta x equity risk premium |
| Cost of debt | 7.35% | Interest expense / average total debt |
| Market capitalisation | AUD 9.1bn | 98.3% of capital |
| Total debt | AUD 160.7m | 1.7% of capital, book value as a proxy |
| Tax rate | 22.5% | Effective, capped at statutory |
| WACC | 12.83% | 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%
62% of EV
- Forecast FCFF, final year
- AUD 132.1m
- Capex at depreciation, working capital in reinvestment
- AUD 141.5m
- Less reinvestment at g/ROIC (19.5% of NOPAT)
- AUD -27.6m
- Capitalised
- AUD 113.9m
- ROIC (WACC floor)
- 12.8%
- Terminal value, undiscounted
- AUD 1.1bn
- Terminal value, discounted
- AUD 656.5m
- Enterprise value
- AUD 1.1bn
- Less net debt
- AUD 121.0m
- Equity value
- AUD 939.3m
Exit at 20.0x EBITDA
88% of EV
- Terminal value, undiscounted
- AUD 4.9bn
- Terminal value, discounted
- AUD 2.8bn
- Enterprise value
- AUD 3.2bn
- Less net debt
- AUD 121.0m
- Equity value
- AUD 3.1bn
Spread between methods: 107%.
Sensitivity
Value per share (AUD) by discount rate and long-run growth.
| Long-run growth | |||||
|---|---|---|---|---|---|
| Discount rate | 1.50% | 2.00% | 2.50% | 3.00% | 3.50% |
| 10.83% | 6.33 | 6.39 | 6.45 | 6.53 | 6.60 |
| 11.83% | 5.66 | 5.69 | 5.72 | 5.75 | 5.79 |
| 12.83% | 5.12 | 5.14 | 5.16 | 5.17 | 5.19 |
| 13.83% | 4.69 | 4.70 | 4.72 | 4.73 | 4.75 |
| 14.83% | 4.31 | 4.33 | 4.34 | 4.35 | 4.37 |
Outlined: this model. Green text: above today's price of 50.10. 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.
| Input | Model | Implied | Gap |
|---|---|---|---|
| Revenue growth, every year | 10.0% | 79.0% | +69.0pp |
| Discount rate | 12.8% | 3.6% | -9.2pp |
Live formulas, not pasted numbers - edit a driver and the workbook reprices.
Yahoo Finance and RBA data. General information, not advice. Methodology.