DCF Studio

    CPU.AX · ASX · Financial Services

    Computershare Limited

    Also onShortfallConsensus DriftCrosscheck

    Implied value per share

    AUD 123.53

    Market price

    AUD 40.90

    Implied upside

    +202.0%

    5-year forecast · Perpetuity growth terminal value · Mid-year discounting · Base case · USD model at 1.4042

    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.
    Wrong toolThis line has no market capitalisation, which means it is not ordinary shares - typically a hybrid, preference line, note or unlisted stub. A discounted cashflow values a claim on the whole business, so applying it here attributes all of the group’s revenue to a security that has no such claim. Its value is its coupon and call schedule. Look up the ordinary line instead.
    AdjustedReports in USD, trades in AUD. Modelled in USD, converted at the end.

    No usable EV/EBITDA (EBITDA is not positive), so the exit multiple falls back to 8x.

    Value Per Share

    Perpetuity growth
    AUD 123.53+202.0%
    Exit multiple
    AUD 32.58-20.3%
    Market price
    AUD 40.90

    Same forecast, different terminal treatment. Percentages vs price.

    Forecast Cashflows

    Reporting currency (USD). Outflows negative.

    0m467m934mFY27FY28FY29FY30FY31
    Nominal FCFFDiscounted to todayUSD
    LineFY27FY28FY29FY30FY31CAGR
    RevenueUSD 3.4bnUSD 3.6bnUSD 3.8bnUSD 4.0bnUSD 4.2bn+5.5%
    EBITUSD 942.1mUSD 993.5mUSD 1.0bnUSD 1.1bnUSD 1.2bn+5.5%
    NOPATUSD 682.7mUSD 719.9mUSD 759.1mUSD 800.5mUSD 844.1m+5.5%
    Add depreciation & amortisationUSD 231.8mUSD 244.4mUSD 257.7mUSD 271.8mUSD 286.6m+5.5%
    Less capital expenditureUSD -91.1mUSD -96.1mUSD -101.3mUSD -106.8mUSD -112.7m+5.5%
    Less increase in working capitalUSD -67.7mUSD -71.4mUSD -75.3mUSD -79.4mUSD -83.7m+5.5%
    Free cashflow to firmUSD 755.6mUSD 796.8mUSD 840.3mUSD 886.1mUSD 934.3m+5.5%
    Discount factor0.98120.94460.90930.87540.8427-
    Present valueUSD 741.4mUSD 752.7mUSD 764.1mUSD 775.7mUSD 787.4m+1.5%
    Present Value Of The ForecastUSD 3.8bn

    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
    Beta0.316Reported -0.021, pulled toward 1.0 (Blume)
    Cost of equity7.24%Risk-free + beta x equity risk premium
    Cost of debt5.35%Floored at the risk-free rate (implied cost of debt was lower)
    Market capitalisationUSD 0.000.0% of capital
    Total debtUSD 1.4bn100.0% of capital, book value as a proxy
    Tax rate27.5%Effective, capped at statutory
    WACC3.88%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 87.97

    93% of EV

    Forecast FCFF, final year
    USD 934.3m
    Capex at depreciation, working capital in reinvestment
    USD 893.2m
    Less reinvestment at g/ROIC (15.6% of NOPAT)
    USD -139.6m
    Capitalised
    USD 753.6m
    ROIC (reported)
    16.0%
    Terminal value, undiscounted
    USD 56.2bn
    Terminal value, discounted
    USD 47.3bn
    Enterprise value
    USD 51.2bn
    Less net debt
    USD 157.3m
    Equity value
    USD 51.0bn

    Exit at 8.0x EBITDA

    Value per shareUSD 23.20

    72% of EV

    Terminal value, undiscounted
    USD 11.6bn
    Terminal value, discounted
    USD 9.8bn
    Enterprise value
    USD 13.6bn
    Less net debt
    USD 157.3m
    Equity value
    USD 13.5bn

    Spread between methods: 117%.

    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%
    1.88%354.08————
    2.88%97.20144.78319.08——
    3.88%56.6068.1287.97130.47286.12
    4.88%40.0644.7751.4461.6679.28
    5.88%31.0633.4636.5440.6946.58

    Outlined: this model. Green text: above today's price of 29.13. 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 year5.5%-17.1%-22.5pp
    EBIT margin27.4%8.0%-19.4pp
    Discount rate3.9%6.8%+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.