DCF Studio

    HUB.AX · ASX · Financial Services

    HUB24 Limited

    Also onShortfallConsensus DriftCrosscheck

    Implied value per share

    AUD 23.63

    Market price

    AUD 70.23

    Implied upside

    -66.4%

    5-year forecast · Perpetuity growth terminal value · Mid-year discounting · Base case

    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.

    Current EV/EBITDA of 30.6x 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 23.63-66.4%
    Exit multiple
    AUD 70.96+1.0%
    Market price
    AUD 70.23

    Same forecast, different terminal treatment. Percentages vs price.

    Forecast Cashflows

    Reporting currency (AUD). Outflows negative.

    0m127m253mFY27FY28FY29FY30FY31
    Nominal FCFFDiscounted to todayAUD
    LineFY27FY28FY29FY30FY31CAGR
    RevenueAUD 594.5mAUD 720.1mAUD 872.1mAUD 1.1bnAUD 1.3bn+21.1%
    EBITAUD 130.2mAUD 157.7mAUD 191.0mAUD 231.3mAUD 280.1m+21.1%
    NOPATAUD 104.4mAUD 126.4mAUD 153.1mAUD 185.4mAUD 224.6m+21.1%
    Add depreciation & amortisationAUD 63.5mAUD 76.9mAUD 93.2mAUD 112.9mAUD 136.7m+21.1%
    Less capital expenditureAUD -36.8mAUD -44.5mAUD -53.9mAUD -65.3mAUD -79.1m+21.1%
    Less increase in working capitalAUD -13.6mAUD -16.4mAUD -19.9mAUD -24.1mAUD -29.2m+21.1%
    Free cashflow to firmAUD 117.6mAUD 142.4mAUD 172.5mAUD 208.9mAUD 253.1m+21.1%
    Discount factor0.94840.85310.76740.69020.6209-
    Present valueAUD 111.5mAUD 121.5mAUD 132.4mAUD 144.2mAUD 157.1m+8.9%
    Present Value Of The ForecastAUD 666.8m

    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
    Beta0.985Reported 0.978, pulled toward 1.0 (Blume)
    Cost of equity11.26%Risk-free + beta x equity risk premium
    Cost of debt5.35%Floored at the risk-free rate (implied cost of debt was lower)
    Market capitalisationAUD 5.7bn98.8% of capital
    Total debtAUD 71.7m1.2% of capital, book value as a proxy
    Tax rate19.8%Effective, capped at statutory
    WACC11.17%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 23.63

    66% of EV

    Forecast FCFF, final year
    AUD 253.1m
    Capex at depreciation, working capital in reinvestment
    AUD 224.6m
    Less reinvestment at g/ROIC (22.4% of NOPAT)
    AUD -50.3m
    Capitalised
    AUD 174.3m
    ROIC (WACC floor)
    11.2%
    Terminal value, undiscounted
    AUD 2.1bn
    Terminal value, discounted
    AUD 1.3bn
    Enterprise value
    AUD 1.9bn
    Less net debt
    AUD 669.0k
    Equity value
    AUD 1.9bn

    Exit at 20.0x EBITDA

    Value per shareAUD 70.96

    89% of EV

    Terminal value, undiscounted
    AUD 8.3bn
    Terminal value, discounted
    AUD 5.2bn
    Enterprise value
    AUD 5.8bn
    Less net debt
    AUD 669.0k
    Equity value
    AUD 5.8bn

    Spread between methods: 100%.

    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%
    9.17%29.4629.8330.2430.7131.25
    10.17%26.0926.2626.4426.6426.86
    11.17%23.4823.5523.6323.7023.78
    12.17%21.4621.5321.6021.6621.73
    13.17%19.7619.8219.8819.9420.00

    Outlined: this model. Green text: above today's price of 70.23. 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 year21.1%55.2%+34.1pp
    EBIT margin21.9%66.8%+44.9pp
    Discount rate11.2%5.3%-5.9pp
    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.