PME.AX · ASX · Healthcare
Pro Medicus Limited
Also onShortfallConsensus DriftCrosscheck
Implied value per share
AUD 50.15
Market price
AUD 169.57
Implied upside
-70.4%
5-year forecast · Perpetuity growth terminal value · Mid-year discounting · Base case
Current EV/EBITDA of 85.6x 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
Same forecast, different terminal treatment. Percentages vs price.
Forecast Cashflows
Reporting currency (AUD). Outflows negative.
| Line | FY27 | FY28 | FY29 | FY30 | FY31 | CAGR |
|---|---|---|---|---|---|---|
| Revenue | AUD 334.8m | AUD 428.5m | AUD 548.5m | AUD 702.0m | AUD 898.4m | +28.0% |
| EBIT | AUD 239.1m | AUD 306.0m | AUD 391.6m | AUD 501.2m | AUD 641.4m | +28.0% |
| NOPAT | AUD 168.5m | AUD 215.7m | AUD 276.0m | AUD 353.3m | AUD 452.1m | +28.0% |
| Add depreciation & amortisation | AUD 15.2m | AUD 19.4m | AUD 24.8m | AUD 31.8m | AUD 40.7m | +28.0% |
| Less capital expenditure | AUD -13.5m | AUD -17.2m | AUD -22.1m | AUD -28.2m | AUD -36.2m | +28.0% |
| Less increase in working capital | AUD -23.5m | AUD -30.1m | AUD -38.5m | AUD -49.3m | AUD -63.1m | +28.0% |
| Free cashflow to firm | AUD 146.6m | AUD 187.7m | AUD 240.2m | AUD 307.4m | AUD 393.5m | +28.0% |
| Discount factor | 0.9549 | 0.8708 | 0.7941 | 0.7242 | 0.6604 | - |
| Present value | AUD 140.0m | AUD 163.4m | AUD 190.8m | AUD 222.6m | AUD 259.9m | +16.7% |
| Present Value Of The Forecast | AUD 976.7m | |||||
Discount Rate
Source shown per component. All overridable above.
| Risk-free rate | 5.35% | Australian Government 10-year (RBA F2) |
| Equity risk premium | 6.00% | Market assumption |
| Beta | 0.719 | Reported 0.580, pulled toward 1.0 (Blume) |
| Cost of equity | 9.66% | Risk-free + beta x equity risk premium |
| Cost of debt | 7.35% | Assumed: risk-free + 2bp (interest expense not reported) |
| Market capitalisation | AUD 17.7bn | 100.0% of capital |
| Total debt | AUD 2.2m | 0.0% of capital, book value as a proxy |
| Tax rate | 29.5% | Effective, capped at statutory |
| WACC | 9.66% | 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%
80% of EV
- Forecast FCFF, final year
- AUD 393.5m
- Capex at depreciation, working capital in reinvestment
- AUD 452.1m
- Less reinvestment at g/ROIC (5.9% of NOPAT)
- AUD -26.7m
- Capitalised
- AUD 425.4m
- ROIC (reported)
- 42.3%
- Terminal value, undiscounted
- AUD 6.1bn
- Terminal value, discounted
- AUD 4.0bn
- Enterprise value
- AUD 5.0bn
- Less net debt
- AUD -248.4m
- Equity value
- AUD 5.2bn
Exit at 20.0x EBITDA
90% of EV
- Terminal value, undiscounted
- AUD 13.6bn
- Terminal value, discounted
- AUD 9.0bn
- Enterprise value
- AUD 10.0bn
- Less net debt
- AUD -248.4m
- Equity value
- AUD 10.2bn
Spread between methods: 64%.
Sensitivity
Value per share (AUD) by discount rate and long-run growth.
| Long-run growth | |||||
|---|---|---|---|---|---|
| Discount rate | 1.50% | 2.00% | 2.50% | 3.00% | 3.50% |
| 7.66% | 61.48 | 65.44 | 70.16 | 75.88 | 82.97 |
| 8.66% | 52.62 | 55.35 | 58.52 | 62.24 | 66.68 |
| 9.66% | 45.95 | 47.92 | 50.15 | 52.72 | 55.70 |
| 10.66% | 40.76 | 42.22 | 43.86 | 45.70 | 47.80 |
| 11.66% | 36.60 | 37.72 | 38.95 | 40.32 | 41.86 |
Outlined: this model. Green text: above today's price of 169.57. 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.
| Input | Model | Implied | Gap |
|---|---|---|---|
| Revenue growth, every year | 28.0% | 67.2% | +39.2pp |
| Discount rate | 9.7% | 4.7% | -5.0pp |
Live formulas, not pasted numbers - edit a driver and the workbook reprices.
Yahoo Finance and RBA data. General information, not advice. Methodology.