DCF Studio

    SDF.AX · ASX · Financial Services

    Steadfast Group Limited

    Also onShortfallConsensus DriftCrosscheck

    Implied value per share

    AUD 6.56

    Market price

    AUD 5.72

    Implied upside

    +14.7%

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

    Wrong toolThis is a financial. Banks and insurers report no meaningful operating income, and capex and working capital do not mean what a free-cashflow model assumes, so a DCF will misprice it. The model below runs on best-effort numbers - treat it as an illustration, not a valuation.
    AdjustedSome line items were not reported and have been derived. Each one is labelled in the workings below.
    AdjustedReported capital expenditure averages 1.26% of revenue against depreciation and amortisation of 7.93%. A business cannot depreciate more than it invests indefinitely. Capex has been set to 7.93% 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 6.56+14.7%
    Exit multiple
    AUD 10.91+90.7%
    Market price
    AUD 5.72

    Same forecast, different terminal treatment. Percentages vs price.

    Forecast Cashflows

    Reporting currency (AUD). Outflows negative.

    0m394m788mFY27FY28FY29FY30FY31
    Nominal FCFFDiscounted to todayAUD
    LineFY27FY28FY29FY30FY31CAGR
    RevenueAUD 1.8bnAUD 2.1bnAUD 2.4bnAUD 2.8bnAUD 3.2bn+15.6%
    EBITAUD 373.9mAUD 432.1mAUD 499.3mAUD 576.9mAUD 666.6m+15.6%
    NOPATAUD 261.7mAUD 302.4mAUD 349.5mAUD 403.8mAUD 466.6m+15.6%
    Add depreciation & amortisationAUD 142.6mAUD 164.8mAUD 190.5mAUD 220.1mAUD 254.3m+15.6%
    Less capital expenditureAUD -142.6mAUD -164.8mAUD -190.5mAUD -220.1mAUD -254.3m+15.6%
    Less increase in working capitalAUD 180.2mAUD 208.3mAUD 240.7mAUD 278.1mAUD 321.4m-15.6%
    Free cashflow to firmAUD 442.0mAUD 510.7mAUD 590.1mAUD 681.9mAUD 788.0m+15.6%
    Discount factor0.96640.90250.84280.78710.7351-
    Present valueAUD 427.1mAUD 460.9mAUD 497.4mAUD 536.8mAUD 579.2m+7.9%
    Present Value Of The ForecastAUD 2.5bn

    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
    Beta0.463Reported 0.198, pulled toward 1.0 (Blume)
    Cost of equity8.12%Risk-free + beta x equity risk premium
    Cost of debt5.35%Floored at the risk-free rate (implied cost of debt was lower)
    Market capitalisationAUD 6.4bn76.1% of capital
    Total debtAUD 2.0bn23.9% of capital, book value as a proxy
    Tax rate30.0%Effective, capped at statutory
    WACC7.08%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 6.56

    67% of EV

    Forecast FCFF, final year
    AUD 788.0m
    Capex at depreciation, working capital in reinvestment
    AUD 466.6m
    Less reinvestment at g/ROIC (35.3% of NOPAT)
    AUD -164.8m
    Capitalised
    AUD 301.8m
    ROIC (WACC floor)
    7.1%
    Terminal value, undiscounted
    AUD 6.8bn
    Terminal value, discounted
    AUD 5.0bn
    Enterprise value
    AUD 7.5bn
    Less net debt
    AUD 169.8m
    Equity value
    AUD 7.3bn

    Exit at 14.5x EBITDA

    Value per shareAUD 10.91

    80% of EV

    Terminal value, undiscounted
    AUD 13.3bn
    Terminal value, discounted
    AUD 9.8bn
    Enterprise value
    AUD 12.3bn
    Less net debt
    AUD 169.8m
    Equity value
    AUD 12.1bn

    Spread between methods: 50%.

    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%
    5.08%8.928.968.999.029.06
    6.08%7.537.557.587.617.63
    7.08%6.526.546.566.586.61
    8.08%5.765.785.805.815.83
    9.08%5.165.185.195.215.23

    Outlined: this model. Green text: above today's price of 5.72. 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 year15.6%12.7%-2.9pp
    EBIT margin20.8%17.8%-3.0pp
    Discount rate7.1%8.2%+1.1pp
    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.