DCF Studio

    RYM.NZ · NZE · Healthcare

    Ryman Healthcare Limited

    Also onConsensus Drift

    Implied value per share

    NZD -4.29

    Market price

    NZD 1.99

    Implied upside

    -315.9%

    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.
    AdjustedFree cashflow is negative in at least one forecast year, so terminal value carries most of the valuation.
    AdjustedCapital expenditure runs at 39.7% of revenue against depreciation of 7.2%. A perpetuity has to be a steady state, so the terminal year uses maintenance capex at depreciation and then charges the reinvestment terminal growth requires (g/ROIC of NOPAT). The bridge is shown under Terminal Value.
    NoteRisk-free rate is an assumption: NZD assumption - no free live source available for this market.

    No usable EV/EBITDA (EBITDA is not positive), so the exit multiple falls back to 8x.

    Value Per Share

    Perpetuity growth
    NZD -4.29-315.9%
    Exit multiple
    NZD -4.32-317.9%
    Market price
    NZD 1.99

    Same forecast, different terminal treatment. Percentages vs price.

    Forecast Cashflows

    Reporting currency (NZD). Outflows negative.

    -409925292-2049626460FY26FY27FY28FY29FY30
    Nominal FCFFDiscounted to todayNZD
    LineFY26FY27FY28FY29FY30CAGR
    RevenueNZD 801.7mNZD 900.5mNZD 1.0bnNZD 1.1bnNZD 1.3bn+12.3%
    EBITNZD -61.0mNZD -68.5mNZD -77.0mNZD -86.4mNZD -97.1m-12.3%
    NOPATNZD -58.5mNZD -65.7mNZD -73.8mNZD -82.9mNZD -93.2m-12.3%
    Add depreciation & amortisationNZD 58.0mNZD 65.1mNZD 73.1mNZD 82.2mNZD 92.3m+12.3%
    Less capital expenditureNZD -318.0mNZD -357.1mNZD -401.1mNZD -450.5mNZD -506.0m+12.3%
    Less increase in working capitalNZD 60.9mNZD 68.4mNZD 76.9mNZD 86.3mNZD 97.0m-12.3%
    Free cashflow to firmNZD -257.6mNZD -289.3mNZD -324.9mNZD -365.0mNZD -409.9m-12.3%
    Discount factor0.96550.89990.83880.78180.7287-
    Present valueNZD -248.7mNZD -260.3mNZD -272.6mNZD -285.3mNZD -298.7m-4.7%
    Present Value Of The ForecastNZD -1.4bn

    Discount Rate

    Source shown per component. All overridable above.

    Risk-free rate4.50%NZD assumption - no free live source available for this market (assumption)
    Equity risk premium6.50%Market assumption
    Beta0.557Reported 0.339, pulled toward 1.0 (Blume)
    Cost of equity8.12%Risk-free + beta x equity risk premium
    Cost of debt6.56%Interest expense / average total debt
    Market capitalisationNZD 2.0bn54.3% of capital
    Total debtNZD 1.7bn45.7% of capital, book value as a proxy
    Tax rate4.0%Effective, capped at statutory
    WACC7.28%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 shareNZD -4.29

    0% of EV

    Terminal value, undiscounted
    NZD 0.00
    Terminal value, discounted
    NZD 0.00
    Enterprise value
    NZD -1.4bn
    Less net debt
    NZD 1.7bn
    Equity value
    NZD -3.0bn

    Exit at 8.0x EBITDA

    Value per shareNZD -4.32

    2% of EV

    Terminal value, undiscounted
    NZD -38.4m
    Terminal value, discounted
    NZD -28.0m
    Enterprise value
    NZD -1.4bn
    Less net debt
    NZD 1.7bn
    Equity value
    NZD -3.1bn

    Sensitivity

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

    Long-run growth
    Discount rate1.50%2.00%2.50%3.00%3.50%
    5.29%-4.38-4.38-4.38-4.38-4.38
    6.29%-4.33-4.33-4.33-4.33-4.33
    7.29%-4.29-4.29-4.29-4.29-4.29
    8.29%-4.24-4.24-4.24-4.24-4.24
    9.29%-4.20-4.20-4.20-4.20-4.20

    Outlined: this model. Green text: above today's price of 1.99. 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-7.6%24.9%+32.5pp
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    Yahoo Finance and RBA data. General information, not advice. Methodology.