DCF Studio

    CYL.AX · ASX · Basic Materials

    Catalyst Metals Limited

    Also onShortfallConsensus DriftCrosscheck

    Implied value per share

    AUD 2.03

    Market price

    AUD 6.78

    Implied upside

    -70.0%

    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.
    AdjustedOnly 3 year(s) of history available to anchor assumptions on.
    AdjustedCapital expenditure runs at 24.8% of revenue against depreciation of 16.3%. A perpetuity has to be a steady state, so the terminal year uses maintenance capex at depreciation and then charges the reinvestment terminal growth requires (g/ROIC of NOPAT). The bridge is shown under Terminal Value.

    Current EV/EBITDA of 25.0x 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

    Perpetuity growth
    AUD 2.03-70.0%
    Exit multiple
    AUD 20.29+199.3%
    Market price
    AUD 6.78

    Same forecast, different terminal treatment. Percentages vs price.

    Forecast Cashflows

    Reporting currency (AUD). Outflows negative.

    0m123m245mFY25FY26FY27FY28FY29
    Nominal FCFFDiscounted to todayAUD
    LineFY25FY26FY27FY28FY29CAGR
    RevenueAUD 475.5mAUD 713.3mAUD 1.1bnAUD 1.6bnAUD 2.4bn+50.0%
    EBITAUD -10.6mAUD -16.0mAUD -23.9mAUD -35.9mAUD -53.8m-50.0%
    NOPATAUD -10.3mAUD -15.4mAUD -23.1mAUD -34.6mAUD -52.0m-50.0%
    Add depreciation & amortisationAUD 77.7mAUD 116.5mAUD 174.7mAUD 262.1mAUD 393.1m+50.0%
    Less capital expenditureAUD -117.9mAUD -176.8mAUD -265.2mAUD -397.8mAUD -596.8m+50.0%
    Less increase in working capitalAUD 98.9mAUD 148.3mAUD 222.5mAUD 333.7mAUD 500.6m-50.0%
    Free cashflow to firmAUD 48.4mAUD 72.6mAUD 108.9mAUD 163.4mAUD 245.0m+50.0%
    Discount factor0.94360.84010.74800.66600.5929-
    Present valueAUD 45.7mAUD 61.0mAUD 81.5mAUD 108.8mAUD 145.3m+33.6%
    Present Value Of The ForecastAUD 442.2m

    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
    Beta1.178Reported 1.265, pulled toward 1.0 (Blume)
    Cost of equity12.41%Risk-free + beta x equity risk premium
    Cost of debt7.35%Implied cost of debt of 17.7% is not a credible funding cost, so risk-free + 2bp is assumed instead. Interest expense and reported debt are measuring different things - common for banks, whose interest expense includes deposits that total debt excludes.
    Market capitalisationAUD 1.8bn98.2% of capital
    Total debtAUD 33.0m1.8% of capital, book value as a proxy
    Tax rate3.5%Effective, capped at statutory
    WACC12.32%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 2.03

    0% of EV

    Terminal value, undiscounted
    AUD 0.00
    Terminal value, discounted
    AUD 0.00
    Enterprise value
    AUD 442.2m
    Less net debt
    AUD -6.0m
    Equity value
    AUD 448.2m

    Exit at 20.0x EBITDA

    Value per shareAUD 20.29

    90% of EV

    Terminal value, undiscounted
    AUD 6.8bn
    Terminal value, discounted
    AUD 4.0bn
    Enterprise value
    AUD 4.5bn
    Less net debt
    AUD -6.0m
    Equity value
    AUD 4.5bn

    Spread between methods: 164%.

    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%
    10.32%2.152.152.152.152.15
    11.32%2.092.092.092.092.09
    12.32%2.032.032.032.032.03
    13.32%1.981.981.981.981.98
    14.32%1.931.931.931.931.93

    Outlined: this model. Green text: above today's price of 6.78. 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 year50.0%80.5%+30.5pp
    EBIT margin-2.2%6.1%+8.3pp
    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.