DCF Studio

    PRX.AS · AMS · Consumer Cyclical

    Prosus N.V.

    Also onConsensus Drift

    Implied value per share

    EUR -1.89

    Market price

    EUR 35.85

    Implied upside

    -105.3%

    5-year forecast · Perpetuity growth terminal value · Mid-year discounting · Base case · USD model at 0.8704

    AdjustedReports in USD, trades in EUR. Modelled in USD, converted at the end.
    AdjustedFree cashflow is negative in at least one forecast year, so terminal value carries most of the valuation.
    NoteRisk-free rate is an assumption: USD assumption - no free live source available for this market.

    Current EV/EBITDA of 92.8x 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
    EUR -1.89-105.3%
    Exit multiple
    EUR 1.95-94.6%
    Market price
    EUR 35.85

    Same forecast, different terminal treatment. Percentages vs price.

    Forecast Cashflows

    Reporting currency (USD). Outflows negative.

    -1048400261-5242001310FY27FY28FY29FY30FY31
    Nominal FCFFDiscounted to todayUSD
    LineFY27FY28FY29FY30FY31CAGR
    RevenueUSD 12.1bnUSD 15.2bnUSD 19.0bnUSD 23.8bnUSD 29.8bn+25.2%
    EBITUSD -154.8mUSD -193.8mUSD -242.6mUSD -303.7mUSD -380.2m-25.2%
    NOPATUSD -153.0mUSD -191.5mUSD -239.7mUSD -300.1mUSD -375.6m-25.2%
    Add depreciation & amortisationUSD 434.1mUSD 543.4mUSD 680.2mUSD 851.6mUSD 1.1bn+25.2%
    Less capital expenditureUSD -316.0mUSD -395.5mUSD -495.2mUSD -619.9mUSD -776.0m+25.2%
    Less increase in working capitalUSD -392.0mUSD -490.8mUSD -614.4mUSD -769.1mUSD -962.8m+25.2%
    Free cashflow to firmUSD -426.9mUSD -534.4mUSD -669.0mUSD -837.5mUSD -1.0bn-25.2%
    Discount factor0.95920.88250.81200.74700.6873-
    Present valueUSD -409.5mUSD -471.6mUSD -543.2mUSD -625.6mUSD -720.6m-15.2%
    Present Value Of The ForecastUSD -2.8bn

    Discount Rate

    Source shown per component. All overridable above.

    Risk-free rate4.20%USD assumption - no free live source available for this market (assumption)
    Equity risk premium6.50%Market assumption
    Beta0.855Reported 0.783, pulled toward 1.0 (Blume)
    Cost of equity9.75%Risk-free + beta x equity risk premium
    Cost of debt4.20%Floored at the risk-free rate (implied cost of debt was lower)
    Market capitalisationUSD 75.0bn81.0% of capital
    Total debtUSD 17.6bn19.0% of capital, book value as a proxy
    Tax rate1.2%Effective, capped at statutory
    WACC8.69%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 shareUSD -2.17

    0% of EV

    Terminal value, undiscounted
    USD 0.00
    Terminal value, discounted
    USD 0.00
    Enterprise value
    USD -2.8bn
    Less net debt
    USD 1.9bn
    Equity value
    USD -4.6bn

    Exit at 20.0x EBITDA

    Value per shareUSD 2.24

    142% of EV

    Terminal value, undiscounted
    USD 13.7bn
    Terminal value, discounted
    USD 9.4bn
    Enterprise value
    USD 6.7bn
    Less net debt
    USD 1.9bn
    Equity value
    USD 4.8bn

    Sensitivity

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

    Long-run growth
    Discount rate1.50%2.00%2.50%3.00%3.50%
    6.69%-2.24-2.24-2.24-2.24-2.24
    7.69%-2.21-2.21-2.21-2.21-2.21
    8.69%-2.17-2.17-2.17-2.17-2.17
    9.69%-2.14-2.14-2.14-2.14-2.14
    10.69%-2.11-2.11-2.11-2.11-2.11

    Outlined: this model. Green text: above today's price of 41.19. 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
    EBIT margin-1.3%28.0%+29.3pp
    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.