DCF Studio

    NXT.AX · ASX · Technology

    NEXTDC Limited

    Also onConsensus Drift

    Implied value per share

    AUD -26.45

    Market price

    AUD 6.25

    Implied upside

    -522.9%

    10-year forecast · Perpetuity growth terminal value · Mid-year discounting · Base case · Price 2026-11-03 · Accounts to 2026-06-30

    AdjustedSome line items were not reported and have been derived. Each one is labelled in the workings below.
    AdjustedFree cashflow is negative in at least one forecast year, so terminal value carries most of the valuation.
    AdjustedCapital expenditure runs at 306.3% of revenue against depreciation of 45.3%. A perpetuity has to be a steady state, so the forecast tapers capex to maintenance at depreciation plus the reinvestment terminal growth requires (g/ROIC of NOPAT), and the terminal year carries on from there. The bridge is shown under Terminal Value.

    Current EV/EBITDA of 32.0x sits outside a defensible 3-20x band, so the exit multiple is capped at 20.0x. A multiple that far out usually means EBITDA is the wrong denominator for this business.

    Value Per Share

    Perpetuity growth
    AUD -26.45-522.9%
    Exit multiple
    AUD 3.57-43.0%
    Market price
    AUD 6.25

    Same forecast, different terminal treatment. Percentages vs price.

    Forecast Cashflows

    Reporting currency (AUD). Outflows negative.

    -3367m-1647m72mFY27FY28FY29FY30FY31FY32FY33FY34FY35FY36
    Nominal FCFFDiscounted to todayAUD
    LineFY27FY28FY29FY30FY31FY32FY33FY34FY35FY36CAGR
    RevenueAUD 594.6mAUD 891.9mAUD 1.3bnAUD 1.8bnAUD 2.3bnAUD 3.0bnAUD 3.6bnAUD 4.1bnAUD 4.4bnAUD 4.5bn+25.3%
    EBITAUD 18.8mAUD 28.3mAUD 40.7mAUD 56.2mAUD 74.3mAUD 93.8mAUD 112.9mAUD 129.1mAUD 140.0mAUD 143.5m+25.3%
    NOPATAUD 13.2mAUD 19.8mAUD 28.5mAUD 39.4mAUD 52.0mAUD 65.7mAUD 79.0mAUD 90.4mAUD 98.0mAUD 100.5m+25.3%
    Add depreciation & amortisationAUD 269.3mAUD 404.0mAUD 582.0mAUD 803.8mAUD 1.1bnAUD 1.3bnAUD 1.6bnAUD 1.8bnAUD 2.0bnAUD 2.1bn+25.3%
    Less capital expenditureAUD -1.8bnAUD -2.5bnAUD -3.2bnAUD -3.9bnAUD -4.5bnAUD -4.8bnAUD -4.7bnAUD -4.2bnAUD -3.3bnAUD -2.1bn+1.5%
    Capex, % of revenue306.3%277.3%248.4%219.5%190.6%161.7%132.7%103.8%74.9%46.0%-
    Less increase in working capitalAUD 2.1mAUD 6.5mAUD 8.5mAUD 10.6mAUD 12.4mAUD 13.4mAUD 13.1mAUD 11.1mAUD 7.5mAUD 2.4m-1.3%
    Free cashflow to firmAUD -1.5bnAUD -2.0bnAUD -2.6bnAUD -3.0bnAUD -3.3bnAUD -3.4bnAUD -3.0bnAUD -2.3bnAUD -1.2bnAUD 72.2m-
    Discount factor0.96140.88860.82140.75920.70180.64860.59950.55420.51220.4735-
    Present valueAUD -1.5bnAUD -1.8bnAUD -2.1bnAUD -2.3bnAUD -2.3bnAUD -2.2bnAUD -1.8bnAUD -1.3bnAUD -616.0mAUD 34.2m-
    Present Value Of The ForecastAUD -15.9bn

    Discount Rate

    Source shown per component. All overridable above.

    Risk-free rate5.21%Australian Government 10-year (RBA F2), 2026-10-28
    Equity risk premium4.23%Damodaran, January 2026
    Beta1.229Reported 1.342, pulled toward 1.0 (Blume)
    Cost of equity10.41%Risk-free + beta x equity risk premium
    Cost of debt7.21%Risk-free + 200bp, the spread for a D rating at -0.5x interest cover, capped at 200bp because one year's cover is too noisy to charge more. Book interest / average debt was lower, at 3.3%.
    Market capitalisationAUD 4.8bn58.6% of capital
    Total debtAUD 3.4bn41.4% of capital, book value as a proxy
    Tax rate30.0%Effective, capped at statutory
    WACC8.19%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 -26.45

    -4% of EV

    Forecast FCFF, final year
    AUD 72.2m
    Capex at depreciation, working capital in reinvestment
    AUD 100.5m
    Less reinvestment at g/ROIC (30.5% of NOPAT)
    AUD -30.7m
    Capitalised
    AUD 69.8m
    ROIC (WACC floor)
    8.2%
    Terminal value, undiscounted
    AUD 1.3bn
    Terminal value, discounted
    AUD 595.4m
    Enterprise value
    AUD -15.3bn
    Less net debt
    AUD 2.5bn
    Equity value
    AUD -17.8bn

    Exit at 20.0x EBITDA

    Value per shareAUD 3.57

    426% of EV

    Terminal value, undiscounted
    AUD 43.9bn
    Terminal value, discounted
    AUD 20.8bn
    Enterprise value
    AUD 4.9bn
    Less net debt
    AUD 2.5bn
    Equity value
    AUD 2.4bn

    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%
    6.19%-27.84-27.86-27.89-27.91-27.93
    7.19%-27.14-27.16-27.18-27.20-27.22
    8.19%-26.42-26.44-26.45-26.47-26.48
    9.19%-25.70-25.72-25.73-25.74-25.75
    10.19%-25.00-25.01-25.02-25.03-25.04

    Outlined: this model. Green text: above today's price of 6.25. 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.

    InputActualModelImplied
    EBIT margin13.8%3.2%81.8%
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    Live formulas, not pasted numbers - edit a driver and the workbook reprices.

    Yahoo Finance and RBA data. General information, not advice. Methodology.