DCF Studio

    PXA.AX · ASX · Technology

    PEXA Group Limited

    Also onConsensus Drift

    Implied value per share

    AUD 0.52

    Market price

    AUD 6.89

    Implied upside

    -92.5%

    5-year forecast · Perpetuity growth terminal value · Mid-year discounting · Base case

    Wrong toolThis model values the shares at 7.5% of the market price. A gap that size is a modelling failure rather than a view - most often an unusable beta, a currency or units mismatch, or a cashflow base that does not represent the business. Read the figures below as diagnostics, not as a call.
    AdjustedSome line items were not reported and have been derived. Each one is labelled in the workings below.
    AdjustedReported capital expenditure averages 12.82% of revenue against depreciation and amortisation of 26.36%. A business cannot depreciate more than it invests indefinitely. Capex has been set to 26.36% of revenue so the forecast is not handed free growth. The accounts do not separate depreciation from amortisation, so the combined charge is used - if a large part of it is amortisation of an acquisition, the reported capex is probably right and this substitution is not. Override it if the reported figure is right.

    Value Per Share

    Perpetuity growth
    AUD 0.52-92.5%
    Exit multiple
    AUD 8.19+18.9%
    Market price
    AUD 6.89

    Same forecast, different terminal treatment. Percentages vs price.

    Forecast Cashflows

    Reporting currency (AUD). Outflows negative.

    0m15m30mFY27FY28FY29FY30FY31
    Nominal FCFFDiscounted to todayAUD
    LineFY27FY28FY29FY30FY31CAGR
    RevenueAUD 452.8mAUD 512.3mAUD 579.5mAUD 655.6mAUD 741.7m+13.1%
    EBITAUD 16.5mAUD 18.6mAUD 21.1mAUD 23.8mAUD 27.0m+13.1%
    NOPATAUD 11.5mAUD 13.0mAUD 14.7mAUD 16.7mAUD 18.9m+13.1%
    Add depreciation & amortisationAUD 119.4mAUD 135.0mAUD 152.7mAUD 172.8mAUD 195.5m+13.1%
    Less capital expenditureAUD -119.4mAUD -135.0mAUD -152.7mAUD -172.8mAUD -195.5m+13.1%
    Less increase in working capitalAUD 6.6mAUD 7.5mAUD 8.5mAUD 9.6mAUD 10.9m-13.1%
    Free cashflow to firmAUD 18.2mAUD 20.6mAUD 23.3mAUD 26.3mAUD 29.8m+13.1%
    Discount factor0.96120.88810.82050.75810.7004-
    Present valueAUD 17.5mAUD 18.3mAUD 19.1mAUD 19.9mAUD 20.8m+4.5%
    Present Value Of The ForecastAUD 95.6m

    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
    Beta0.617Reported 0.429, pulled toward 1.0 (Blume)
    Cost of equity9.05%Risk-free + beta x equity risk premium
    Cost of debt5.69%Interest expense / average total debt
    Market capitalisationAUD 1.2bn83.9% of capital
    Total debtAUD 232.8m16.1% of capital, book value as a proxy
    Tax rate30.0%Effective, capped at statutory
    WACC8.24%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 0.52

    63% of EV

    Forecast FCFF, final year
    AUD 29.8m
    Capex at depreciation, working capital in reinvestment
    AUD 18.9m
    Less reinvestment at g/ROIC (30.4% of NOPAT)
    AUD -5.7m
    Capitalised
    AUD 13.1m
    ROIC (WACC floor)
    8.2%
    Terminal value, undiscounted
    AUD 234.9m
    Terminal value, discounted
    AUD 164.5m
    Enterprise value
    AUD 260.1m
    Less net debt
    AUD 169.2m
    Equity value
    AUD 90.9m

    Exit at 9.7x EBITDA

    Value per shareAUD 8.19

    94% of EV

    Terminal value, undiscounted
    AUD 2.2bn
    Terminal value, discounted
    AUD 1.5bn
    Enterprise value
    AUD 1.6bn
    Less net debt
    AUD 169.2m
    Equity value
    AUD 1.4bn

    Spread between methods: 176%.

    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%
    6.24%0.940.950.950.960.96
    7.24%0.690.700.700.710.72
    8.24%0.510.510.520.520.53
    9.24%0.360.370.370.370.38
    10.24%0.240.250.250.250.26

    Outlined: this model. Green text: above today's price of 6.89. 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 year13.1%57.4%+44.2pp
    EBIT margin3.6%21.7%+18.1pp
    Discount rate8.2%2.6%-5.6pp
    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.