DCF Studio

    EBO.NZ · NZE · Healthcare

    EBOS Group Limited

    Also onConsensus Drift

    Implied value per share

    NZD 50.87

    Market price

    NZD 19.84

    Implied upside

    +156.4%

    5-year forecast · Perpetuity growth terminal value · Mid-year discounting · Base case · AUD model at 1.2435

    AdjustedSome line items were not reported and have been derived. Each one is labelled in the workings below.
    AdjustedReports in AUD, trades in NZD. Modelled in AUD, converted at the end.
    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.
    NoteRisk-free rate is an assumption: NZD assumption - no free live source available for this market.

    Value Per Share

    Perpetuity growth
    NZD 50.87+156.4%
    Exit multiple
    NZD 42.48+114.1%
    Market price
    NZD 19.84

    Same forecast, different terminal treatment. Percentages vs price.

    Forecast Cashflows

    Reporting currency (AUD). Outflows negative.

    0m238m476mFY27FY28FY29FY30FY31
    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 432.2mAUD 463.3mAUD 496.7mAUD 532.5mAUD 570.8m+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 360.4mAUD 386.3mAUD 414.2mAUD 444.0mAUD 476.0m+7.2%
    Discount factor0.97050.91410.86100.81100.7639-
    Present valueAUD 349.8mAUD 353.2mAUD 356.6mAUD 360.1mAUD 363.6m+1.0%
    Present Value Of The ForecastAUD 1.8bn

    Discount Rate

    Source shown per component. All overridable above.

    Risk-free rate4.50%NZD assumption - no free live source available for this market (assumption)
    Equity risk premium6.50%Market assumption
    Beta0.428Reported 0.146, pulled toward 1.0 (Blume)
    Cost of equity7.28%Risk-free + beta x equity risk premium
    Cost of debt5.81%Interest expense / average total debt
    Market capitalisationAUD 4.1bn64.0% of capital
    Total debtAUD 2.3bn36.0% of capital, book value as a proxy
    Tax rate28.0%Effective, capped at statutory
    WACC6.17%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 40.91

    83% of EV

    Forecast FCFF, final year
    AUD 476.0m
    Capex at depreciation, working capital in reinvestment
    AUD 570.8m
    Less reinvestment at g/ROIC (28.8% of NOPAT)
    AUD -164.5m
    Capitalised
    AUD 406.4m
    ROIC (reported)
    8.7%
    Terminal value, undiscounted
    AUD 11.4bn
    Terminal value, discounted
    AUD 8.7bn
    Enterprise value
    AUD 10.5bn
    Less net debt
    AUD 2.0bn
    Equity value
    AUD 8.4bn

    Exit at 9.0x EBITDA

    Value per shareAUD 34.16

    80% of EV

    Terminal value, undiscounted
    AUD 9.5bn
    Terminal value, discounted
    AUD 7.3bn
    Enterprise value
    AUD 9.1bn
    Less net debt
    AUD 2.0bn
    Equity value
    AUD 7.1bn

    Spread between methods: 18%.

    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%
    4.17%71.7382.64100.00132.13212.17
    5.17%49.5553.7159.3967.6280.72
    6.17%36.8838.6640.9143.8247.78
    7.17%28.6829.4430.3431.4232.77
    8.17%22.9423.2023.4923.8124.18

    Outlined: this model. Green text: above today's price of 15.95. 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%-9.8%-17.0pp
    EBIT margin3.4%1.8%-1.6pp
    Discount rate6.2%10.2%+4.1pp
    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.