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    CNU.AX · ASX · Communication Services

    Chorus Limited

    Also onShortfallConsensus DriftCrosscheck

    Implied value per share

    AUD -0.46

    Market price

    AUD 6.82

    Implied upside

    -106.7%

    5-year forecast · Perpetuity growth terminal value · Mid-year discounting · Base case · NZD model at 0.8033

    AdjustedSome line items were not reported and have been derived. Each one is labelled in the workings below.
    AdjustedReports in NZD, trades in AUD. Modelled in NZD, converted at the end.

    Value Per Share

    Perpetuity growth
    AUD -0.46-106.7%
    Exit multiple
    AUD 4.75-30.4%
    Market price
    AUD 6.82

    Same forecast, different terminal treatment. Percentages vs price.

    Forecast Cashflows

    Reporting currency (NZD). Outflows negative.

    0m106m212mFY27FY28FY29FY30FY31
    Nominal FCFFDiscounted to todayNZD
    LineFY27FY28FY29FY30FY31CAGR
    RevenueNZD 1.0bnNZD 1.1bnNZD 1.1bnNZD 1.1bnNZD 1.1bn+1.6%
    EBITNZD 245.1mNZD 249.2mNZD 253.2mNZD 257.4mNZD 261.6m+1.6%
    NOPATNZD 171.6mNZD 174.4mNZD 177.3mNZD 180.2mNZD 183.1m+1.6%
    Add depreciation & amortisationNZD 476.3mNZD 484.1mNZD 492.0mNZD 500.1mNZD 508.3m+1.6%
    Less capital expenditureNZD -450.8mNZD -458.2mNZD -465.7mNZD -473.3mNZD -481.1m+1.6%
    Less increase in working capitalNZD 1.5mNZD 1.5mNZD 1.5mNZD 1.6mNZD 1.6m-1.6%
    Free cashflow to firmNZD 198.6mNZD 201.8mNZD 205.1mNZD 208.5mNZD 211.9m+1.6%
    Discount factor0.96860.90880.85260.79990.7505-
    Present valueNZD 192.3mNZD 183.4mNZD 174.9mNZD 166.8mNZD 159.0m-4.6%
    Present Value Of The ForecastNZD 876.5m

    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
    Beta0.599Reported 0.401, pulled toward 1.0 (Blume)
    Cost of equity8.94%Risk-free + beta x equity risk premium
    Cost of debt6.54%Interest expense / average total debt
    Market capitalisationNZD 3.0bn46.1% of capital
    Total debtNZD 3.5bn53.9% of capital, book value as a proxy
    Tax rate30.0%Effective, capped at statutory
    WACC6.59%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 shareNZD -0.57

    71% of EV

    Forecast FCFF, final year
    NZD 211.9m
    Capex at depreciation, working capital in reinvestment
    NZD 183.1m
    Less reinvestment at g/ROIC (38.0% of NOPAT)
    NZD -69.5m
    Capitalised
    NZD 113.6m
    ROIC (WACC floor)
    6.6%
    Terminal value, undiscounted
    NZD 2.9bn
    Terminal value, discounted
    NZD 2.1bn
    Enterprise value
    NZD 3.0bn
    Less net debt
    NZD 3.3bn
    Equity value
    NZD -248.6m

    Exit at 8.6x EBITDA

    Value per shareNZD 5.91

    85% of EV

    Terminal value, undiscounted
    NZD 6.6bn
    Terminal value, discounted
    NZD 5.0bn
    Enterprise value
    NZD 5.8bn
    Less net debt
    NZD 3.3bn
    Equity value
    NZD 2.6bn

    Sensitivity

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

    Long-run growth
    Discount rate1.50%2.00%2.50%3.00%3.50%
    4.59%2.232.262.302.342.38
    5.59%0.550.580.610.640.67
    6.59%-0.62-0.60-0.57-0.55-0.52
    7.59%-1.48-1.46-1.44-1.42-1.40
    8.59%-2.15-2.13-2.11-2.09-2.08

    Outlined: this model. Green text: above today's price of 8.49. 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 year1.6%21.9%+20.2pp
    EBIT margin23.4%55.3%+31.8pp
    Discount rate6.6%3.7%-2.9pp
    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.