DCF Studio

    INVE-B.ST · STO · Financial Services

    Investor AB (publ)

    Also onConsensus Drift

    Implied value per share

    SEK 3564.68

    Market price

    SEK 405.75

    Implied upside

    +778.5%

    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.
    Wrong toolThis line has no market capitalisation, which means it is not ordinary shares - typically a hybrid, preference line, note or unlisted stub. A discounted cashflow values a claim on the whole business, so applying it here attributes all of the group’s revenue to a security that has no such claim. Its value is its coupon and call schedule. Look up the ordinary line instead.
    AdjustedSome line items were not reported and have been derived. Each one is labelled in the workings below.
    AdjustedOnly 3 year(s) of history available to anchor assumptions on.
    AdjustedConsensus rests on as few as 1 analyst estimate(s).
    AdjustedCapital expenditure runs at 2.0% of revenue against depreciation of 0.0%. 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.
    NoteRisk-free rate is an assumption: USD assumption - no free live source available for this market.

    No usable EV/EBITDA (EBITDA is not positive), so the exit multiple falls back to 8x.

    Value Per Share

    Perpetuity growth
    SEK 3564.68+778.5%
    Exit multiple
    SEK 775.52+91.1%
    Market price
    SEK 405.75

    Same forecast, different terminal treatment. Percentages vs price.

    Forecast Cashflows

    Reporting currency (SEK). Outflows negative.

    0bn116bn231bnFY26FY27FY28FY29FY30
    Nominal FCFFDiscounted to todaySEK
    LineFY26FY27FY28FY29FY30CAGR
    RevenueSEK 237.2bnSEK 259.9bnSEK 284.7bnSEK 311.9bnSEK 341.6bn+9.5%
    EBITSEK 167.4bnSEK 183.3bnSEK 200.8bnSEK 220.0bnSEK 241.0bn+9.5%
    NOPATSEK 166.2bnSEK 182.0bnSEK 199.4bnSEK 218.5bnSEK 239.3bn+9.5%
    Add depreciation & amortisationSEK 0.00SEK 0.00SEK 0.00SEK 0.00SEK 0.00-
    Less capital expenditureSEK -4.9bnSEK -5.3bnSEK -5.8bnSEK -6.4bnSEK -7.0bn+9.5%
    Less increase in working capitalSEK -646.2mSEK -707.9mSEK -775.4mSEK -849.4mSEK -930.5m+9.5%
    Free cashflow to firmSEK 160.7bnSEK 176.0bnSEK 192.8bnSEK 211.2bnSEK 231.4bn+9.5%
    Discount factor0.97980.94060.90290.86670.8320-
    Present valueSEK 157.4bnSEK 165.6bnSEK 174.1bnSEK 183.1bnSEK 192.5bn+5.2%
    Present Value Of The ForecastSEK 872.7bn

    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
    Beta0.853Reported 0.780, pulled toward 1.0 (Blume)
    Cost of equity9.74%Risk-free + beta x equity risk premium
    Cost of debt4.20%Floored at the risk-free rate (implied cost of debt was lower)
    Market capitalisationSEK 0.000.0% of capital
    Total debtSEK 115.3bn100.0% of capital, book value as a proxy
    Tax rate0.7%Effective, capped at statutory
    WACC4.17%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 shareSEK 3564.68

    92% of EV

    Forecast FCFF, final year
    SEK 231.4bn
    Capex at depreciation, working capital in reinvestment
    SEK 239.3bn
    Less reinvestment at g/ROIC (16.9% of NOPAT)
    SEK -40.5bn
    Capitalised
    SEK 198.8bn
    ROIC (reported)
    14.8%
    Terminal value, undiscounted
    SEK 12195.9bn
    Terminal value, discounted
    SEK 10147.5bn
    Enterprise value
    SEK 11020.2bn
    Less net debt
    SEK 101.3bn
    Equity value
    SEK 10919.0bn

    Exit at 8.0x EBITDA

    Value per shareSEK 775.52

    65% of EV

    Terminal value, undiscounted
    SEK 1927.9bn
    Terminal value, discounted
    SEK 1604.1bn
    Enterprise value
    SEK 2476.8bn
    Less net debt
    SEK 101.3bn
    Equity value
    SEK 2375.5bn

    Spread between methods: 129%.

    Sensitivity

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

    Long-run growth
    Discount rate1.50%2.00%2.50%3.00%3.50%
    2.17%9910.0536907.91———
    3.17%3964.405372.668877.1632898.38—
    4.17%2471.292892.533564.584808.827904.90
    5.17%1791.731976.652230.012599.123187.90
    6.17%1403.181499.851622.301782.742002.49

    Outlined: this model. Green text: above today's price of 405.75. 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%-30.1%-39.6pp
    EBIT margin70.5%8.8%-61.8pp
    Discount rate4.2%17.3%+13.1pp
    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.