DCF Studio

    CTD.AX · ASX · Consumer Cyclical

    Corporate Travel Management Limited

    Also onShortfallConsensus DriftCrosscheck

    Implied value per share

    AUD 2.90

    Market price

    AUD 2.66

    Implied upside

    +9.0%

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

    AdjustedSome line items were not reported and have been derived. Each one is labelled in the workings below.
    AdjustedReported capital expenditure averages 3.66% of revenue against depreciation and amortisation of 9.75%. A business cannot depreciate more than it invests indefinitely. Capex has been set to 9.75% of revenue so the forecast is not handed free growth. The accounts do not separate depreciation from amortisation, so the combined charge is used - if a large part of it is amortisation of an acquisition, the reported capex is probably right and this substitution is not. Override it if the reported figure is right.
    AdjustedFree cashflow is negative in at least one forecast year, so terminal value carries most of the valuation.

    Value Per Share

    Perpetuity growth
    AUD 2.90+9.0%
    Exit multiple
    AUD 4.23+59.2%
    Market price
    AUD 2.66

    Same forecast, different terminal treatment. Percentages vs price.

    Forecast Cashflows

    Reporting currency (AUD). Outflows negative.

    -94421414-472107070FY26FY27FY28FY29FY30
    Nominal FCFFDiscounted to todayAUD
    LineFY26FY27FY28FY29FY30CAGR
    RevenueAUD 757.9mAUD 903.4mAUD 1.1bnAUD 1.3bnAUD 1.5bn+19.2%
    EBITAUD 53.8mAUD 64.1mAUD 76.4mAUD 91.1mAUD 108.6m+19.2%
    NOPATAUD 39.6mAUD 47.2mAUD 56.3mAUD 67.1mAUD 79.9m+19.2%
    Add depreciation & amortisationAUD 73.9mAUD 88.1mAUD 105.0mAUD 125.1mAUD 149.2m+19.2%
    Less capital expenditureAUD -73.9mAUD -88.1mAUD -105.0mAUD -125.1mAUD -149.2m+19.2%
    Less increase in working capitalAUD -86.3mAUD -102.9mAUD -122.7mAUD -146.3mAUD -174.4m+19.2%
    Free cashflow to firmAUD -46.8mAUD -55.7mAUD -66.4mAUD -79.2mAUD -94.4m-19.2%
    Discount factor0.95610.87410.79910.73060.6679-
    Present valueAUD -44.7mAUD -48.7mAUD -53.1mAUD -57.9mAUD -63.1m-9.0%
    Present Value Of The ForecastAUD -267.5m

    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
    Beta0.737Reported 0.608, pulled toward 1.0 (Blume)
    Cost of equity9.77%Risk-free + beta x equity risk premium
    Cost of debt5.35%Floored at the risk-free rate (implied cost of debt was lower)
    Market capitalisationAUD 389.2m93.3% of capital
    Total debtAUD 27.7m6.7% of capital, book value as a proxy
    Tax rate26.4%Effective, capped at statutory
    WACC9.38%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 shareAUD 2.90

    185% of EV

    Forecast FCFF, final year
    AUD -94.4m
    Capex at depreciation, working capital in reinvestment
    AUD 79.9m
    Less reinvestment at g/ROIC (26.6% of NOPAT)
    AUD -21.3m
    Capitalised
    AUD 58.6m
    ROIC (WACC floor)
    9.4%
    Terminal value, undiscounted
    AUD 873.1m
    Terminal value, discounted
    AUD 583.1m
    Enterprise value
    AUD 315.7m
    Less net debt
    AUD -96.3m
    Equity value
    AUD 411.9m

    Exit at 4.5x EBITDA

    Value per shareAUD 4.23

    153% of EV

    Terminal value, undiscounted
    AUD 1.2bn
    Terminal value, discounted
    AUD 772.8m
    Enterprise value
    AUD 505.4m
    Less net debt
    AUD -96.3m
    Equity value
    AUD 601.7m

    Spread between methods: 37%.

    Sensitivity

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

    Long-run growth
    Discount rate1.50%2.00%2.50%3.00%3.50%
    7.38%4.314.344.374.394.42
    8.38%3.493.513.543.563.58
    9.38%2.862.882.902.922.94
    10.38%2.372.382.402.422.43
    11.38%1.971.992.002.022.03

    Outlined: this model. Green text: above today's price of 2.66. 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 year19.2%26.4%+7.2pp
    EBIT margin7.1%6.8%-0.3pp
    Discount rate9.4%9.8%+0.4pp
    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.