DCF Studio

    RVTY · NYQ · Healthcare

    Revvity, Inc.

    Also onShortfallConsensus DriftCrosscheck

    Implied value per share

    USD 36.24

    Market price

    USD 143.45

    Implied upside

    -74.7%

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

    Current EV/EBITDA of 24.3x 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
    USD 36.24-74.7%
    Exit multiple
    USD 77.72-45.8%
    Market price
    USD 143.45

    Same forecast, different terminal treatment. Percentages vs price.

    Forecast Cashflows

    Reporting currency (USD). Outflows negative.

    0m403m807mFY26FY27FY28FY29FY30
    Nominal FCFFDiscounted to todayUSD
    LineFY26FY27FY28FY29FY30CAGR
    RevenueUSD 2.7bnUSD 2.6bnUSD 2.5bnUSD 2.3bnUSD 2.2bn-4.8%
    EBITUSD 397.1mUSD 378.0mUSD 359.8mUSD 342.4mUSD 325.9m-4.8%
    NOPATUSD 355.3mUSD 338.2mUSD 321.9mUSD 306.4mUSD 291.7m-4.8%
    Add depreciation & amortisationUSD 396.3mUSD 377.2mUSD 359.1mUSD 341.8mUSD 325.3m-4.8%
    Less capital expenditureUSD -76.5mUSD -72.9mUSD -69.4mUSD -66.0mUSD -62.8m-4.8%
    Less increase in working capitalUSD 131.8mUSD 125.4mUSD 119.4mUSD 113.6mUSD 108.2m+4.8%
    Free cashflow to firmUSD 806.8mUSD 768.0mUSD 731.0mUSD 695.8mUSD 662.3m-4.8%
    Discount factor0.95470.87020.79310.72290.6589-
    Present valueUSD 770.3mUSD 668.3mUSD 579.8mUSD 503.0mUSD 436.4m-13.2%
    Present Value Of The ForecastUSD 3.0bn

    Discount Rate

    Source shown per component. All overridable above.

    Risk-free rate5.00%US 10-year Treasury (^TNX)
    Equity risk premium5.50%Market assumption
    Beta1.060Reported 1.089, pulled toward 1.0 (Blume)
    Cost of equity10.83%Risk-free + beta x equity risk premium
    Cost of debt5.00%Floored at the risk-free rate (implied cost of debt was lower)
    Market capitalisationUSD 16.0bn82.5% of capital
    Total debtUSD 3.4bn17.5% of capital, book value as a proxy
    Tax rate10.5%Effective, capped at statutory
    WACC9.71%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 36.24

    56% of EV

    Forecast FCFF, final year
    USD 662.3m
    Capex at depreciation, working capital in reinvestment
    USD 538.7m
    Less reinvestment at g/ROIC (25.7% of NOPAT)
    USD -138.7m
    Capitalised
    USD 400.1m
    ROIC (WACC floor)
    9.7%
    Terminal value, undiscounted
    USD 5.7bn
    Terminal value, discounted
    USD 3.7bn
    Enterprise value
    USD 6.7bn
    Less net debt
    USD 2.5bn
    Equity value
    USD 4.2bn

    Exit at 20.0x EBITDA

    Value per shareUSD 77.72

    74% of EV

    Terminal value, undiscounted
    USD 13.0bn
    Terminal value, discounted
    USD 8.6bn
    Enterprise value
    USD 11.5bn
    Less net debt
    USD 2.5bn
    Equity value
    USD 9.1bn

    Spread between methods: 73%.

    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%
    7.71%48.7048.9149.1349.3449.56
    8.71%41.5941.7741.9642.1442.32
    9.71%35.9336.0836.2436.4036.55
    10.71%31.3031.4331.5731.7131.84
    11.71%27.4427.5627.6827.8027.92

    Outlined: this model. Green text: above today's price of 143.45. 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 year-4.8%31.2%+36.1pp
    EBIT margin14.6%69.4%+54.8pp
    Discount rate9.7%3.1%-6.7pp
    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.