DCF Studio

    IQV · NYQ · Healthcare

    IQVIA Holdings Inc.

    Also onShortfallConsensus DriftCrosscheck

    Implied value per share

    USD 128.47

    Market price

    USD 266.42

    Implied upside

    -51.8%

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

    Value Per Share

    Perpetuity growth
    USD 128.47-51.8%
    Exit multiple
    USD 261.35-1.9%
    Market price
    USD 266.42

    Same forecast, different terminal treatment. Percentages vs price.

    Forecast Cashflows

    Reporting currency (USD). Outflows negative.

    0bn2bn3bnFY26FY27FY28FY29FY30
    Nominal FCFFDiscounted to todayUSD
    LineFY26FY27FY28FY29FY30CAGR
    RevenueUSD 17.0bnUSD 17.7bnUSD 18.5bnUSD 19.2bnUSD 20.0bn+4.2%
    EBITUSD 2.3bnUSD 2.4bnUSD 2.5bnUSD 2.7bnUSD 2.8bn+4.2%
    NOPATUSD 1.9bnUSD 2.0bnUSD 2.1bnUSD 2.2bnUSD 2.3bn+4.2%
    Add depreciation & amortisationUSD 1.3bnUSD 1.3bnUSD 1.4bnUSD 1.4bnUSD 1.5bn+4.2%
    Less capital expenditureUSD -706.0mUSD -735.7mUSD -766.7mUSD -799.1mUSD -832.7m+4.2%
    Less increase in working capitalUSD 95.0mUSD 99.0mUSD 103.1mUSD 107.5mUSD 112.0m-4.2%
    Free cashflow to firmUSD 2.6bnUSD 2.7bnUSD 2.8bnUSD 2.9bnUSD 3.1bn+4.2%
    Discount factor0.95650.87500.80050.73230.6700-
    Present valueUSD 2.5bnUSD 2.4bnUSD 2.3bnUSD 2.2bnUSD 2.1bn-4.7%
    Present Value Of The ForecastUSD 11.3bn

    Discount Rate

    Source shown per component. All overridable above.

    Risk-free rate5.00%US 10-year Treasury (^TNX)
    Equity risk premium5.50%Market assumption
    Beta1.125Reported 1.186, pulled toward 1.0 (Blume)
    Cost of equity11.18%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 43.9bn73.3% of capital
    Total debtUSD 15.9bn26.7% of capital, book value as a proxy
    Tax rate16.9%Effective, capped at statutory
    WACC9.31%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 128.47

    69% of EV

    Forecast FCFF, final year
    USD 3.1bn
    Capex at depreciation, working capital in reinvestment
    USD 3.4bn
    Less reinvestment at g/ROIC (26.9% of NOPAT)
    USD -902.6m
    Capitalised
    USD 2.5bn
    ROIC (WACC floor)
    9.3%
    Terminal value, undiscounted
    USD 37.0bn
    Terminal value, discounted
    USD 24.8bn
    Enterprise value
    USD 36.1bn
    Less net debt
    USD 13.8bn
    Equity value
    USD 22.3bn

    Exit at 16.8x EBITDA

    Value per shareUSD 261.35

    81% of EV

    Terminal value, undiscounted
    USD 71.4bn
    Terminal value, discounted
    USD 47.8bn
    Enterprise value
    USD 59.2bn
    Less net debt
    USD 13.8bn
    Equity value
    USD 45.3bn

    Spread between methods: 68%.

    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%
    7.31%191.99196.50201.77208.08215.83
    8.31%153.50154.86156.32157.92159.68
    9.31%127.07127.77128.47129.16129.86
    10.31%106.81107.41108.02108.62109.23
    11.31%90.1690.6991.2291.7592.28

    Outlined: this model. Green text: above today's price of 266.42. 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 year4.2%16.3%+12.1pp
    EBIT margin13.8%26.8%+13.0pp
    Discount rate9.3%6.4%-2.9pp
    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.