DCF Studio

    NHF.AX · ASX · Financial Services

    nib holdings limited

    Also onShortfallConsensus DriftCrosscheck

    Implied value per share

    AUD 9.47

    Market price

    AUD 6.57

    Implied upside

    +44.2%

    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.
    AdjustedSome line items were not reported and have been derived. Each one is labelled in the workings below.

    Value Per Share

    Perpetuity growth
    AUD 9.47+44.2%
    Exit multiple
    AUD 9.14+39.1%
    Market price
    AUD 6.57

    Same forecast, different terminal treatment. Percentages vs price.

    Forecast Cashflows

    Reporting currency (AUD). Outflows negative.

    0m133m266mFY27FY28FY29FY30FY31
    Nominal FCFFDiscounted to todayAUD
    LineFY27FY28FY29FY30FY31CAGR
    RevenueAUD 4.0bnAUD 4.3bnAUD 4.6bnAUD 4.9bnAUD 5.2bn+6.5%
    EBITAUD 311.6mAUD 331.9mAUD 353.6mAUD 376.6mAUD 401.2m+6.5%
    NOPATAUD 218.4mAUD 232.6mAUD 247.8mAUD 264.0mAUD 281.2m+6.5%
    Add depreciation & amortisationAUD 53.1mAUD 56.6mAUD 60.3mAUD 64.2mAUD 68.4m+6.5%
    Less capital expenditureAUD -55.4mAUD -59.0mAUD -62.8mAUD -66.9mAUD -71.3m+6.5%
    Less increase in working capitalAUD -9.6mAUD -10.3mAUD -10.9mAUD -11.6mAUD -12.4m+6.5%
    Free cashflow to firmAUD 206.5mAUD 220.0mAUD 234.3mAUD 249.6mAUD 265.9m+6.5%
    Discount factor0.96510.89880.83710.77960.7261-
    Present valueAUD 199.3mAUD 197.7mAUD 196.2mAUD 194.6mAUD 193.1m-0.8%
    Present Value Of The ForecastAUD 980.8m

    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
    Beta0.380Reported 0.075, pulled toward 1.0 (Blume)
    Cost of equity7.63%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 3.2bn93.3% of capital
    Total debtAUD 229.3m6.7% of capital, book value as a proxy
    Tax rate29.9%Effective, capped at statutory
    WACC7.37%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 9.47

    78% of EV

    Forecast FCFF, final year
    AUD 265.9m
    Capex at depreciation, working capital in reinvestment
    AUD 281.2m
    Less reinvestment at g/ROIC (18.1% of NOPAT)
    AUD -51.0m
    Capitalised
    AUD 230.2m
    ROIC (reported)
    13.8%
    Terminal value, undiscounted
    AUD 4.8bn
    Terminal value, discounted
    AUD 3.5bn
    Enterprise value
    AUD 4.5bn
    Less net debt
    AUD -123.0m
    Equity value
    AUD 4.6bn

    Exit at 9.8x EBITDA

    Value per shareAUD 9.14

    77% of EV

    Terminal value, undiscounted
    AUD 4.6bn
    Terminal value, discounted
    AUD 3.4bn
    Enterprise value
    AUD 4.3bn
    Less net debt
    AUD -123.0m
    Equity value
    AUD 4.5bn

    Spread between methods: 4%.

    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%
    5.37%13.0014.1415.6717.8421.16
    6.37%10.4211.0211.7712.7514.05
    7.37%8.719.069.479.9810.61
    8.37%7.507.717.968.248.58
    9.37%6.606.736.887.057.24

    Outlined: this model. Green text: above today's price of 6.57. 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 year6.5%-2.4%-8.9pp
    EBIT margin7.7%5.3%-2.4pp
    Discount rate7.4%9.7%+2.4pp
    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.