DCF Studio

    IDR.MC · MCE · Technology

    Indra Sistemas, S.A.

    Also onConsensus Drift

    Implied value per share

    EUR 31.47

    Market price

    EUR 61.80

    Implied upside

    -49.1%

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

    NoteRisk-free rate is an assumption: USD assumption - no free live source available for this market.

    Current EV/EBITDA of 20.3x 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
    EUR 31.47-49.1%
    Exit multiple
    EUR 83.74+35.5%
    Market price
    EUR 61.80

    Same forecast, different terminal treatment. Percentages vs price.

    Forecast Cashflows

    Reporting currency (EUR). Outflows negative.

    0m357m713mFY26FY27FY28FY29FY30
    Nominal FCFFDiscounted to todayEUR
    LineFY26FY27FY28FY29FY30CAGR
    RevenueEUR 6.1bnEUR 6.9bnEUR 7.7bnEUR 8.7bnEUR 9.8bn+12.3%
    EBITEUR 539.2mEUR 605.6mEUR 680.2mEUR 763.9mEUR 858.0m+12.3%
    NOPATEUR 404.4mEUR 454.2mEUR 510.1mEUR 572.9mEUR 643.5m+12.3%
    Add depreciation & amortisationEUR 141.9mEUR 159.4mEUR 179.0mEUR 201.1mEUR 225.9m+12.3%
    Less capital expenditureEUR -117.5mEUR -131.9mEUR -148.2mEUR -166.4mEUR -186.9m+12.3%
    Less increase in working capitalEUR 19.3mEUR 21.6mEUR 24.3mEUR 27.3mEUR 30.6m-12.3%
    Free cashflow to firmEUR 448.1mEUR 503.3mEUR 565.3mEUR 634.9mEUR 713.1m+12.3%
    Discount factor0.95850.88060.80900.74320.6828-
    Present valueEUR 429.5mEUR 443.2mEUR 457.3mEUR 471.9mEUR 486.9m+3.2%
    Present Value Of The ForecastEUR 2.3bn

    Discount Rate

    Source shown per component. All overridable above.

    Risk-free rate4.20%USD assumption - no free live source available for this market (assumption)
    Equity risk premium6.50%Market assumption
    Beta0.987Reported 0.981, pulled toward 1.0 (Blume)
    Cost of equity10.62%Risk-free + beta x equity risk premium
    Cost of debt4.20%Floored at the risk-free rate (implied cost of debt was lower)
    Market capitalisationEUR 10.8bn76.3% of capital
    Total debtEUR 3.4bn23.7% of capital, book value as a proxy
    Tax rate25.0%Effective, capped at statutory
    WACC8.85%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 shareEUR 31.47

    71% of EV

    Forecast FCFF, final year
    EUR 713.1m
    Capex at depreciation, working capital in reinvestment
    EUR 643.5m
    Less reinvestment at g/ROIC (20.8% of NOPAT)
    EUR -133.8m
    Capitalised
    EUR 509.7m
    ROIC (reported)
    12.0%
    Terminal value, undiscounted
    EUR 8.2bn
    Terminal value, discounted
    EUR 5.6bn
    Enterprise value
    EUR 7.9bn
    Less net debt
    EUR 2.4bn
    Equity value
    EUR 5.5bn

    Exit at 20.0x EBITDA

    Value per shareEUR 83.74

    87% of EV

    Terminal value, undiscounted
    EUR 21.7bn
    Terminal value, discounted
    EUR 14.8bn
    Enterprise value
    EUR 17.1bn
    Less net debt
    EUR 2.4bn
    Equity value
    EUR 14.7bn

    Spread between methods: 91%.

    Sensitivity

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

    Long-run growth
    Discount rate1.50%2.00%2.50%3.00%3.50%
    6.85%45.2847.8150.8954.7359.70
    7.85%36.2837.7039.3741.3643.79
    8.85%29.7230.5431.4732.5433.79
    9.85%24.7225.1925.7026.2726.92
    10.85%20.7921.0421.3021.5921.90

    Outlined: this model. Green text: above today's price of 61.80. 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 year12.3%25.7%+13.3pp
    EBIT margin8.8%14.9%+6.1pp
    Discount rate8.8%6.2%-2.7pp
    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.