DCF Studio

    GQG.AX · ASX · Financial Services

    GQG Partners Inc.

    Also onShortfallConsensus DriftCrosscheck

    Implied value per share

    AUD 6.74

    Market price

    AUD 1.07

    Implied upside

    +530.2%

    5-year forecast · Perpetuity growth terminal value · Mid-year discounting · Base case · USD model at 1.4042

    Wrong toolThis is a financial. Banks and insurers report no meaningful operating income, and capex and working capital do not mean what a free-cashflow model assumes, so a DCF will misprice it. The model below runs on best-effort numbers - treat it as an illustration, not a valuation.
    AdjustedSome line items were not reported and have been derived. Each one is labelled in the workings below.
    AdjustedReports in USD, trades in AUD. Modelled in USD, converted at the end.
    AdjustedReported capital expenditure averages just 0.27% 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 1.00% 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.
    AdjustedCapital expenditure runs at 1.0% of revenue against depreciation of 0.1%. 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.

    Value Per Share

    Perpetuity growth
    AUD 6.74+530.2%
    Exit multiple
    AUD 4.15+288.1%
    Market price
    AUD 1.07

    Same forecast, different terminal treatment. Percentages vs price.

    Forecast Cashflows

    Reporting currency (USD). Outflows negative.

    0bn1bn1bnFY26FY27FY28FY29FY30
    Nominal FCFFDiscounted to todayUSD
    LineFY26FY27FY28FY29FY30CAGR
    RevenueUSD 955.6mUSD 1.2bnUSD 1.4bnUSD 1.8bnUSD 2.2bn+22.6%
    EBITUSD 753.7mUSD 924.2mUSD 1.1bnUSD 1.4bnUSD 1.7bn+22.6%
    NOPATUSD 551.5mUSD 676.2mUSD 829.2mUSD 1.0bnUSD 1.2bn+22.6%
    Add depreciation & amortisationUSD 861.6kUSD 1.1mUSD 1.3mUSD 1.6mUSD 1.9m+22.6%
    Less capital expenditureUSD -9.6mUSD -11.7mUSD -14.4mUSD -17.6mUSD -21.6m+22.6%
    Less increase in working capitalUSD -33.0mUSD -40.5mUSD -49.7mUSD -60.9mUSD -74.7m+22.6%
    Free cashflow to firmUSD 509.7mUSD 625.0mUSD 766.4mUSD 939.8mUSD 1.2bn+22.6%
    Discount factor0.95400.86830.79030.71930.6547-
    Present valueUSD 486.3mUSD 542.7mUSD 605.7mUSD 676.0mUSD 754.5m+11.6%
    Present Value Of The ForecastUSD 3.1bn

    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
    Beta0.760Reported 0.642, pulled toward 1.0 (Blume)
    Cost of equity9.91%Risk-free + beta x equity risk premium
    Cost of debt7.35%Assumed: risk-free + 2bp (interest expense not reported)
    Market capitalisationUSD 3.2bn99.2% of capital
    Total debtUSD 26.8m0.8% of capital, book value as a proxy
    Tax rate26.8%Effective, capped at statutory
    WACC9.87%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 shareUSD 4.80

    78% of EV

    Forecast FCFF, final year
    USD 1.2bn
    Capex at depreciation, working capital in reinvestment
    USD 1.2bn
    Less reinvestment at g/ROIC (4.2% of NOPAT)
    USD -52.0m
    Capitalised
    USD 1.2bn
    ROIC (reported)
    60.0%
    Terminal value, undiscounted
    USD 16.6bn
    Terminal value, discounted
    USD 10.9bn
    Enterprise value
    USD 13.9bn
    Less net debt
    USD -108.1m
    Equity value
    USD 14.1bn

    Exit at 4.9x EBITDA

    Value per shareUSD 2.96

    64% of EV

    Terminal value, undiscounted
    USD 8.4bn
    Terminal value, discounted
    USD 5.5bn
    Enterprise value
    USD 8.5bn
    Less net debt
    USD -108.1m
    Equity value
    USD 8.7bn

    Spread between methods: 48%.

    Sensitivity

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

    Long-run growth
    Discount rate1.50%2.00%2.50%3.00%3.50%
    7.87%5.856.236.687.237.90
    8.87%5.015.285.595.966.39
    9.87%4.384.584.805.065.35
    10.87%3.894.044.204.394.60
    11.87%3.493.603.733.874.03

    Outlined: this model. Green text: above today's price of 0.76. 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 year22.6%-22.3%-44.9pp
    EBIT margin78.9%13.2%-65.7pp
    Discount rate9.9%44.6%+34.7pp
    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.