DCF Studio

    LOV.AX · ASX · Consumer Cyclical

    Lovisa Holdings Limited

    Also onShortfallConsensus DriftCrosscheck

    Implied value per share

    AUD 22.81

    Market price

    AUD 22.62

    Implied upside

    +0.8%

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

    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.

    Value Per Share

    Perpetuity growth
    AUD 22.81+0.8%
    Exit multiple
    AUD 49.70+119.7%
    Market price
    AUD 22.62

    Same forecast, different terminal treatment. Percentages vs price.

    Forecast Cashflows

    Reporting currency (AUD). Outflows negative.

    0m172m345mFY25FY26FY27FY28FY29
    Nominal FCFFDiscounted to todayAUD
    LineFY25FY26FY27FY28FY29CAGR
    RevenueAUD 862.2mAUD 1.1bnAUD 1.3bnAUD 1.6bnAUD 2.0bn+23.4%
    EBITAUD 156.3mAUD 192.9mAUD 238.1mAUD 293.8mAUD 362.6m+23.4%
    NOPATAUD 116.5mAUD 143.8mAUD 177.4mAUD 218.9mAUD 270.2m+23.4%
    Add depreciation & amortisationAUD 111.5mAUD 137.6mAUD 169.9mAUD 209.6mAUD 258.7m+23.4%
    Less capital expenditureAUD -76.3mAUD -94.2mAUD -116.3mAUD -143.5mAUD -177.1m+23.4%
    Less increase in working capitalAUD -3.0mAUD -3.7mAUD -4.6mAUD -5.7mAUD -7.0m+23.4%
    Free cashflow to firmAUD 148.7mAUD 183.5mAUD 226.4mAUD 279.4mAUD 344.9m+23.4%
    Discount factor0.94940.85570.77130.69520.6266-
    Present valueAUD 141.1mAUD 157.0mAUD 174.6mAUD 194.3mAUD 216.1m+11.2%
    Present Value Of The ForecastAUD 883.1m

    Discount Rate

    Source shown per component. All overridable above.

    Risk-free rate5.35%Australian Government 10-year (RBA F2)
    Equity risk premium6.00%Market assumption
    Beta1.099Reported 1.148, pulled toward 1.0 (Blume)
    Cost of equity11.94%Risk-free + beta x equity risk premium
    Cost of debt5.35%Floored at the risk-free rate (implied cost of debt was lower)
    Market capitalisationAUD 2.5bn87.5% of capital
    Total debtAUD 359.1m12.5% of capital, book value as a proxy
    Tax rate25.5%Effective, capped at statutory
    WACC10.95%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 shareAUD 22.81

    69% of EV

    Forecast FCFF, final year
    AUD 344.9m
    Capex at depreciation, working capital in reinvestment
    AUD 270.2m
    Less reinvestment at g/ROIC (4.2% of NOPAT)
    AUD -11.3m
    Capitalised
    AUD 259.0m
    ROIC (reported)
    60.0%
    Terminal value, undiscounted
    AUD 3.1bn
    Terminal value, discounted
    AUD 2.0bn
    Enterprise value
    AUD 2.9bn
    Less net debt
    AUD 328.5m
    Equity value
    AUD 2.5bn

    Exit at 12.7x EBITDA

    Value per shareAUD 49.70

    85% of EV

    Terminal value, undiscounted
    AUD 7.9bn
    Terminal value, discounted
    AUD 4.9bn
    Enterprise value
    AUD 5.8bn
    Less net debt
    AUD 328.5m
    Equity value
    AUD 5.5bn

    Spread between methods: 74%.

    Sensitivity

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

    Long-run growth
    Discount rate1.50%2.00%2.50%3.00%3.50%
    8.95%27.4928.9930.7332.7535.14
    9.95%23.8924.9926.2427.6629.31
    10.95%21.0421.8822.8123.8525.04
    11.95%18.7419.3920.1020.8921.78
    12.95%16.8417.3517.9118.5319.20

    Outlined: this model. Green text: above today's price of 22.62. 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 year23.4%23.2%-0.2pp
    EBIT margin18.1%18.0%-0.1pp
    Discount rate10.9%11.0%+0.1pp
    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.