DCF Studio

    RMS.AX · ASX · Basic Materials

    Ramelius Resources Limited

    Also onShortfallConsensus DriftCrosscheck

    Implied value per share

    AUD 2.26

    Market price

    AUD 3.58

    Implied upside

    -36.8%

    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.
    AdjustedOnly 3 year(s) of history available to anchor assumptions on.

    Value Per Share

    Perpetuity growth
    AUD 2.26-36.8%
    Exit multiple
    AUD 8.16+127.8%
    Market price
    AUD 3.58

    Same forecast, different terminal treatment. Percentages vs price.

    Forecast Cashflows

    Reporting currency (AUD). Outflows negative.

    0m174m347mFY25FY26FY27FY28FY29
    Nominal FCFFDiscounted to todayAUD
    LineFY25FY26FY27FY28FY29CAGR
    RevenueAUD 1.1bnAUD 1.3bnAUD 1.6bnAUD 1.9bnAUD 2.3bn+20.9%
    EBITAUD 173.0mAUD 209.2mAUD 252.9mAUD 305.9mAUD 369.8m+20.9%
    NOPATAUD 121.1mAUD 146.4mAUD 177.1mAUD 214.1mAUD 258.9m+20.9%
    Add depreciation & amortisationAUD 274.1mAUD 331.4mAUD 400.7mAUD 484.6mAUD 585.9m+20.9%
    Less capital expenditureAUD -242.3mAUD -293.0mAUD -354.3mAUD -428.4mAUD -518.1m+20.9%
    Less increase in working capitalAUD 9.5mAUD 11.5mAUD 13.9mAUD 16.8mAUD 20.3m-20.9%
    Free cashflow to firmAUD 162.3mAUD 196.3mAUD 237.3mAUD 287.0mAUD 347.0m+20.9%
    Discount factor0.94290.83830.74540.66270.5892-
    Present valueAUD 153.0mAUD 164.5mAUD 176.9mAUD 190.2mAUD 204.5m+7.5%
    Present Value Of The ForecastAUD 889.1m

    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
    Beta1.190Reported 1.283, pulled toward 1.0 (Blume)
    Cost of equity12.49%Risk-free + beta x equity risk premium
    Cost of debt7.35%Implied cost of debt of 21.3% is not a credible funding cost, so risk-free + 2bp is assumed instead. Interest expense and reported debt are measuring different things - common for banks, whose interest expense includes deposits that total debt excludes.
    Market capitalisationAUD 6.8bn99.8% of capital
    Total debtAUD 10.5m0.2% of capital, book value as a proxy
    Tax rate30.0%Effective, capped at statutory
    WACC12.47%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 2.26

    59% of EV

    Forecast FCFF, final year
    AUD 347.0m
    Capex at depreciation, working capital in reinvestment
    AUD 258.9m
    Less reinvestment at g/ROIC (20.0% of NOPAT)
    AUD -51.9m
    Capitalised
    AUD 207.0m
    ROIC (WACC floor)
    12.5%
    Terminal value, undiscounted
    AUD 2.1bn
    Terminal value, discounted
    AUD 1.3bn
    Enterprise value
    AUD 2.1bn
    Less net debt
    AUD -413.9m
    Equity value
    AUD 2.6bn

    Exit at 14.0x EBITDA

    Value per shareAUD 8.16

    90% of EV

    Terminal value, undiscounted
    AUD 13.4bn
    Terminal value, discounted
    AUD 7.9bn
    Enterprise value
    AUD 8.8bn
    Less net debt
    AUD -413.9m
    Equity value
    AUD 9.2bn

    Spread between methods: 113%.

    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%
    10.47%2.612.622.622.632.64
    11.47%2.422.422.432.432.44
    12.47%2.252.262.262.272.27
    13.47%2.112.122.122.132.13
    14.47%1.992.002.002.012.01

    Outlined: this model. Green text: above today's price of 3.58. 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 year20.9%36.3%+15.3pp
    EBIT margin16.2%28.8%+12.6pp
    Discount rate12.5%7.4%-5.1pp
    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.