DCF Studio

    ICE · NYQ · Financial Services

    Intercontinental Exchange, Inc.

    Also onShortfallConsensus DriftCrosscheck

    Implied value per share

    USD 107.51

    Market price

    USD 155.47

    Implied upside

    -30.9%

    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.

    Value Per Share

    Perpetuity growth
    USD 107.51-30.9%
    Exit multiple
    USD 198.06+27.4%
    Market price
    USD 155.47

    Same forecast, different terminal treatment. Percentages vs price.

    Forecast Cashflows

    Reporting currency (USD). Outflows negative.

    0bn3bn7bnFY26FY27FY28FY29FY30
    Nominal FCFFDiscounted to todayUSD
    LineFY26FY27FY28FY29FY30CAGR
    RevenueUSD 13.8bnUSD 15.1bnUSD 16.6bnUSD 18.2bnUSD 19.9bn+9.5%
    EBITUSD 5.4bnUSD 5.9bnUSD 6.5bnUSD 7.1bnUSD 7.7bn+9.5%
    NOPATUSD 4.3bnUSD 4.7bnUSD 5.2bnUSD 5.7bnUSD 6.2bn+9.5%
    Add depreciation & amortisationUSD 1.7bnUSD 1.8bnUSD 2.0bnUSD 2.2bnUSD 2.4bn+9.5%
    Less capital expenditureUSD -781.5mUSD -855.5mUSD -936.5mUSD -1.0bnUSD -1.1bn+9.5%
    Less increase in working capitalUSD -686.1mUSD -751.1mUSD -822.2mUSD -900.0mUSD -985.2m+9.5%
    Free cashflow to firmUSD 4.5bnUSD 5.0bnUSD 5.4bnUSD 5.9bnUSD 6.5bn+9.5%
    Discount factor0.95750.87780.80480.73780.6764-
    Present valueUSD 4.3bnUSD 4.4bnUSD 4.4bnUSD 4.4bnUSD 4.4bn+0.4%
    Present Value Of The ForecastUSD 21.8bn

    Discount Rate

    Source shown per component. All overridable above.

    Risk-free rate5.00%US 10-year Treasury (^TNX)
    Equity risk premium5.50%Market assumption
    Beta0.956Reported 0.934, pulled toward 1.0 (Blume)
    Cost of equity10.25%Risk-free + beta x equity risk premium
    Cost of debt5.00%Floored at the risk-free rate (implied cost of debt was lower)
    Market capitalisationUSD 87.3bn81.1% of capital
    Total debtUSD 20.3bn18.9% of capital, book value as a proxy
    Tax rate19.8%Effective, capped at statutory
    WACC9.08%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 107.51

    72% of EV

    Forecast FCFF, final year
    USD 6.5bn
    Capex at depreciation, working capital in reinvestment
    USD 7.4bn
    Less reinvestment at g/ROIC (27.5% of NOPAT)
    USD -2.0bn
    Capitalised
    USD 5.4bn
    ROIC (WACC floor)
    9.1%
    Terminal value, undiscounted
    USD 83.7bn
    Terminal value, discounted
    USD 56.6bn
    Enterprise value
    USD 78.5bn
    Less net debt
    USD 16.7bn
    Equity value
    USD 61.8bn

    Exit at 15.8x EBITDA

    Value per shareUSD 198.06

    83% of EV

    Terminal value, undiscounted
    USD 160.7bn
    Terminal value, discounted
    USD 108.7bn
    Enterprise value
    USD 130.5bn
    Less net debt
    USD 16.7bn
    Equity value
    USD 113.9bn

    Spread between methods: 59%.

    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%
    7.08%148.15149.46150.92152.57154.51
    8.08%124.15124.71125.28125.84126.40
    9.08%106.55107.03107.51107.99108.47
    10.08%92.4792.8993.3093.7294.14
    11.08%80.9881.3481.7082.0782.43

    Outlined: this model. Green text: above today's price of 155.47. 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 year9.5%17.8%+8.3pp
    EBIT margin39.0%54.7%+15.7pp
    Discount rate9.1%7.0%-2.1pp
    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.