DCF Studio

    IEX · NYQ · Industrials

    IDEX Corporation

    Also onShortfallConsensus DriftCrosscheck

    Implied value per share

    USD 100.87

    Market price

    USD 223.72

    Implied upside

    -54.9%

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

    Value Per Share

    Perpetuity growth
    USD 100.87-54.9%
    Exit multiple
    USD 206.06-7.9%
    Market price
    USD 223.72

    Same forecast, different terminal treatment. Percentages vs price.

    Forecast Cashflows

    Reporting currency (USD). Outflows negative.

    0m423m845mFY26FY27FY28FY29FY30
    Nominal FCFFDiscounted to todayUSD
    LineFY26FY27FY28FY29FY30CAGR
    RevenueUSD 3.6bnUSD 3.7bnUSD 3.8bnUSD 3.9bnUSD 4.0bn+2.8%
    EBITUSD 789.7mUSD 811.9mUSD 834.6mUSD 858.1mUSD 882.2m+2.8%
    NOPATUSD 623.9mUSD 641.4mUSD 659.4mUSD 677.9mUSD 696.9m+2.8%
    Add depreciation & amortisationUSD 175.5mUSD 180.5mUSD 185.5mUSD 190.7mUSD 196.1m+2.8%
    Less capital expenditureUSD -77.4mUSD -79.6mUSD -81.8mUSD -84.1mUSD -86.5m+2.8%
    Less increase in working capitalUSD 34.6mUSD 35.6mUSD 36.6mUSD 37.6mUSD 38.7m-2.8%
    Free cashflow to firmUSD 756.5mUSD 777.8mUSD 799.6mUSD 822.1mUSD 845.2m+2.8%
    Discount factor0.95460.86980.79260.72220.6581-
    Present valueUSD 722.2mUSD 676.5mUSD 633.8mUSD 593.7mUSD 556.2m-6.3%
    Present Value Of The ForecastUSD 3.2bn

    Discount Rate

    Source shown per component. All overridable above.

    Risk-free rate5.00%US 10-year Treasury (^TNX)
    Equity risk premium5.50%Market assumption
    Beta0.981Reported 0.972, pulled toward 1.0 (Blume)
    Cost of equity10.39%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 16.5bn89.9% of capital
    Total debtUSD 1.8bn10.1% of capital, book value as a proxy
    Tax rate21.0%Effective, capped at statutory
    WACC9.75%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 100.87

    64% of EV

    Forecast FCFF, final year
    USD 845.2m
    Capex at depreciation, working capital in reinvestment
    USD 792.0m
    Less reinvestment at g/ROIC (22.9% of NOPAT)
    USD -181.7m
    Capitalised
    USD 610.3m
    ROIC (reported)
    10.9%
    Terminal value, undiscounted
    USD 8.6bn
    Terminal value, discounted
    USD 5.7bn
    Enterprise value
    USD 8.9bn
    Less net debt
    USD 1.3bn
    Equity value
    USD 7.6bn

    Exit at 19.2x EBITDA

    Value per shareUSD 206.06

    81% of EV

    Terminal value, undiscounted
    USD 20.7bn
    Terminal value, discounted
    USD 13.6bn
    Enterprise value
    USD 16.8bn
    Less net debt
    USD 1.3bn
    Equity value
    USD 15.5bn

    Spread between methods: 69%.

    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%
    7.75%132.69136.30140.53145.58151.74
    8.75%113.48115.39117.56120.05122.95
    9.75%98.8999.84100.87102.01103.28
    10.75%87.4387.7988.1788.5688.95
    11.75%78.8079.0779.3579.6279.89

    Outlined: this model. Green text: above today's price of 223.72. 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 year2.8%19.4%+16.6pp
    EBIT margin22.2%49.2%+27.0pp
    Discount rate9.7%5.8%-3.9pp
    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.