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    CWY.AX · ASX · Industrials

    Cleanaway Waste Management Limited

    Also onShortfallConsensus DriftCrosscheck

    Implied value per share

    AUD 0.43

    Market price

    AUD 2.66

    Implied upside

    -83.9%

    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.

    Value Per Share

    Perpetuity growth
    AUD 0.43-83.9%
    Exit multiple
    AUD 3.19+19.9%
    Market price
    AUD 2.66

    Same forecast, different terminal treatment. Percentages vs price.

    Forecast Cashflows

    Reporting currency (AUD). Outflows negative.

    0m127m254mFY27FY28FY29FY30FY31
    Nominal FCFFDiscounted to todayAUD
    LineFY27FY28FY29FY30FY31CAGR
    RevenueAUD 4.6bnAUD 4.9bnAUD 5.3bnAUD 5.6bnAUD 6.0bn+7.0%
    EBITAUD 278.3mAUD 297.9mAUD 318.8mAUD 341.3mAUD 365.2m+7.0%
    NOPATAUD 194.8mAUD 208.5mAUD 223.2mAUD 238.9mAUD 255.7m+7.0%
    Add depreciation & amortisationAUD 462.5mAUD 495.0mAUD 529.8mAUD 567.0mAUD 606.9m+7.0%
    Less capital expenditureAUD -441.2mAUD -472.2mAUD -505.4mAUD -540.9mAUD -578.9m+7.0%
    Less increase in working capitalAUD -22.7mAUD -24.2mAUD -26.0mAUD -27.8mAUD -29.7m+7.0%
    Free cashflow to firmAUD 193.5mAUD 207.1mAUD 221.6mAUD 237.2mAUD 253.9m+7.0%
    Discount factor0.96160.88930.82230.76040.7032-
    Present valueAUD 186.1mAUD 184.1mAUD 182.3mAUD 180.4mAUD 178.5m-1.0%
    Present Value Of The ForecastAUD 911.4m

    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
    Beta0.694Reported 0.544, pulled toward 1.0 (Blume)
    Cost of equity9.51%Risk-free + beta x equity risk premium
    Cost of debt6.60%Interest expense / average total debt
    Market capitalisationAUD 6.0bn71.9% of capital
    Total debtAUD 2.3bn28.1% of capital, book value as a proxy
    Tax rate30.0%Effective, capped at statutory
    WACC8.14%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 0.43

    71% of EV

    Forecast FCFF, final year
    AUD 253.9m
    Capex at depreciation, working capital in reinvestment
    AUD 255.7m
    Less reinvestment at g/ROIC (30.7% of NOPAT)
    AUD -78.5m
    Capitalised
    AUD 177.1m
    ROIC (WACC floor)
    8.1%
    Terminal value, undiscounted
    AUD 3.2bn
    Terminal value, discounted
    AUD 2.3bn
    Enterprise value
    AUD 3.2bn
    Less net debt
    AUD 2.2bn
    Equity value
    AUD 957.2m

    Exit at 12.4x EBITDA

    Value per shareAUD 3.19

    90% of EV

    Terminal value, undiscounted
    AUD 12.0bn
    Terminal value, discounted
    AUD 8.4bn
    Enterprise value
    AUD 9.4bn
    Less net debt
    AUD 2.2bn
    Equity value
    AUD 7.1bn

    Spread between methods: 153%.

    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%
    6.14%0.880.890.890.900.91
    7.14%0.620.620.630.630.64
    8.14%0.420.420.430.430.44
    9.14%0.260.270.270.280.28
    10.14%0.140.140.150.150.15

    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 year7.0%33.9%+26.8pp
    EBIT margin6.0%15.5%+9.5pp
    Discount rate8.1%3.7%-4.4pp
    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.