DCF Studio

    NWH.AX · ASX · Industrials

    NRW Holdings Limited

    Also onShortfallConsensus DriftCrosscheck

    Implied value per share

    AUD 4.49

    Market price

    AUD 7.86

    Implied upside

    -42.9%

    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.

    Value Per Share

    Perpetuity growth
    AUD 4.49-42.9%
    Exit multiple
    AUD 11.07+40.8%
    Market price
    AUD 7.86

    Same forecast, different terminal treatment. Percentages vs price.

    Forecast Cashflows

    Reporting currency (AUD). Outflows negative.

    0m108m215mFY27FY28FY29FY30FY31
    Nominal FCFFDiscounted to todayAUD
    LineFY27FY28FY29FY30FY31CAGR
    RevenueAUD 5.0bnAUD 5.9bnAUD 6.9bnAUD 8.1bnAUD 9.5bn+17.2%
    EBITAUD 212.6mAUD 249.2mAUD 292.1mAUD 342.3mAUD 401.2m+17.2%
    NOPATAUD 153.3mAUD 179.6mAUD 210.5mAUD 246.7mAUD 289.2m+17.2%
    Add depreciation & amortisationAUD 259.8mAUD 304.5mAUD 356.8mAUD 418.2mAUD 490.1m+17.2%
    Less capital expenditureAUD -276.1mAUD -323.6mAUD -379.3mAUD -444.5mAUD -521.0m+17.2%
    Less increase in working capitalAUD -22.9mAUD -26.8mAUD -31.4mAUD -36.8mAUD -43.1m+17.2%
    Free cashflow to firmAUD 114.1mAUD 133.7mAUD 156.7mAUD 183.6mAUD 215.2m+17.2%
    Discount factor0.95020.85790.77450.69930.6313-
    Present valueAUD 108.4mAUD 114.7mAUD 121.4mAUD 128.4mAUD 135.9m+5.8%
    Present Value Of The ForecastAUD 608.7m

    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
    Beta1.075Reported 1.112, pulled toward 1.0 (Blume)
    Cost of equity11.80%Risk-free + beta x equity risk premium
    Cost of debt6.05%Interest expense / average total debt
    Market capitalisationAUD 3.6bn86.0% of capital
    Total debtAUD 585.5m14.0% of capital, book value as a proxy
    Tax rate27.9%Effective, capped at statutory
    WACC10.76%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 4.49

    74% of EV

    Forecast FCFF, final year
    AUD 215.2m
    Capex at depreciation, working capital in reinvestment
    AUD 289.2m
    Less reinvestment at g/ROIC (23.2% of NOPAT)
    AUD -66.9m
    Capitalised
    AUD 222.2m
    ROIC (reported)
    10.8%
    Terminal value, undiscounted
    AUD 2.8bn
    Terminal value, discounted
    AUD 1.7bn
    Enterprise value
    AUD 2.3bn
    Less net debt
    AUD 265.8m
    Equity value
    AUD 2.1bn

    Exit at 8.5x EBITDA

    Value per shareAUD 11.07

    89% of EV

    Terminal value, undiscounted
    AUD 7.6bn
    Terminal value, discounted
    AUD 4.8bn
    Enterprise value
    AUD 5.4bn
    Less net debt
    AUD 265.8m
    Equity value
    AUD 5.1bn

    Spread between methods: 85%.

    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%
    8.76%5.946.056.176.316.48
    9.76%5.105.155.215.275.34
    10.76%4.454.474.494.514.52
    11.76%3.973.984.004.014.03
    12.76%3.563.583.593.613.62

    Outlined: this model. Green text: above today's price of 7.86. 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 year17.2%31.9%+14.7pp
    EBIT margin4.2%6.8%+2.6pp
    Discount rate10.8%7.5%-3.2pp
    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.