DCF Studio

    EBO.AX · ASX · Healthcare

    EBOS Group Limited

    Also onShortfallConsensus DriftCrosscheck

    Implied value per share

    AUD 37.80

    Market price

    AUD 15.92

    Implied upside

    +137.4%

    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 just 0.60% of revenue, which is too low to be the company's real investment - property trusts and similar structures invest through lines that are not reported as capex. Capex has been set to 1.13% 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.

    Value Per Share

    Perpetuity growth
    AUD 37.80+137.4%
    Exit multiple
    AUD 29.10+82.8%
    Market price
    AUD 15.92

    Same forecast, different terminal treatment. Percentages vs price.

    Forecast Cashflows

    Reporting currency (AUD). Outflows negative.

    0m235m471mFY27FY28FY29FY30FY31
    Nominal FCFFDiscounted to todayAUD
    LineFY27FY28FY29FY30FY31CAGR
    RevenueAUD 17.6bnAUD 18.9bnAUD 20.2bnAUD 21.7bnAUD 23.2bn+7.2%
    EBITAUD 600.3mAUD 643.5mAUD 689.9mAUD 739.6mAUD 792.8m+7.2%
    NOPATAUD 428.2mAUD 459.1mAUD 492.1mAUD 527.6mAUD 565.6m+7.2%
    Add depreciation & amortisationAUD 199.2mAUD 213.5mAUD 228.9mAUD 245.4mAUD 263.1m+7.2%
    Less capital expenditureAUD -199.2mAUD -213.5mAUD -228.9mAUD -245.4mAUD -263.1m+7.2%
    Less increase in working capitalAUD -71.8mAUD -77.0mAUD -82.6mAUD -88.5mAUD -94.9m+7.2%
    Free cashflow to firmAUD 356.4mAUD 382.1mAUD 409.6mAUD 439.1mAUD 470.7m+7.2%
    Discount factor0.96960.91160.85710.80580.7576-
    Present valueAUD 345.6mAUD 348.3mAUD 351.0mAUD 353.8mAUD 356.6m+0.8%
    Present Value Of The ForecastAUD 1.8bn

    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
    Beta0.428Reported 0.146, pulled toward 1.0 (Blume)
    Cost of equity7.91%Risk-free + beta x equity risk premium
    Cost of debt5.81%Interest expense / average total debt
    Market capitalisationAUD 3.3bn58.8% of capital
    Total debtAUD 2.3bn41.2% of capital, book value as a proxy
    Tax rate28.7%Effective, capped at statutory
    WACC6.36%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 37.80

    82% of EV

    Forecast FCFF, final year
    AUD 470.7m
    Capex at depreciation, working capital in reinvestment
    AUD 565.6m
    Less reinvestment at g/ROIC (29.1% of NOPAT)
    AUD -164.5m
    Capitalised
    AUD 401.1m
    ROIC (reported)
    8.6%
    Terminal value, undiscounted
    AUD 10.6bn
    Terminal value, discounted
    AUD 8.1bn
    Enterprise value
    AUD 9.8bn
    Less net debt
    AUD 2.0bn
    Equity value
    AUD 7.8bn

    Exit at 7.8x EBITDA

    Value per shareAUD 29.10

    78% of EV

    Terminal value, undiscounted
    AUD 8.3bn
    Terminal value, discounted
    AUD 6.3bn
    Enterprise value
    AUD 8.0bn
    Less net debt
    AUD 2.0bn
    Equity value
    AUD 6.0bn

    Spread between methods: 26%.

    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%
    4.36%65.3274.0487.36110.36159.85
    5.36%45.9249.3553.9360.4070.27
    6.36%34.5135.9837.8040.1343.22
    7.36%26.9827.5928.2929.1330.15
    8.36%21.6621.8322.0222.2222.44

    Outlined: this model. Green text: above today's price of 15.92. 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 year7.2%-8.5%-15.7pp
    EBIT margin3.4%1.9%-1.5pp
    Discount rate6.4%10.2%+3.8pp
    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.