DCF Studio

    SLR.MC · MCE · Utilities

    Solaria Energía y Medio Ambiente, S.A.

    Also onConsensus Drift

    Implied value per share

    EUR -0.34

    Market price

    EUR 17.28

    Implied upside

    -102.0%

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

    AdjustedFree cashflow is negative in at least one forecast year, so terminal value carries most of the valuation.
    AdjustedCapital expenditure runs at 179.3% of revenue against depreciation of 20.9%. 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: USD assumption - no free live source available for this market.

    Value Per Share

    Perpetuity growth
    EUR -0.34-102.0%
    Exit multiple
    EUR 10.67-38.3%
    Market price
    EUR 17.28

    Same forecast, different terminal treatment. Percentages vs price.

    Forecast Cashflows

    Reporting currency (EUR). Outflows negative.

    -336046227-1680231140FY26FY27FY28FY29FY30
    Nominal FCFFDiscounted to todayEUR
    LineFY26FY27FY28FY29FY30CAGR
    RevenueEUR 221.8mEUR 249.2mEUR 279.9mEUR 314.4mEUR 353.2m+12.3%
    EBITEUR 198.9mEUR 223.5mEUR 251.0mEUR 282.0mEUR 316.8m+12.3%
    NOPATEUR 159.2mEUR 178.8mEUR 200.9mEUR 225.6mEUR 253.5m+12.3%
    Add depreciation & amortisationEUR 46.4mEUR 52.1mEUR 58.5mEUR 65.7mEUR 73.8m+12.3%
    Less capital expenditureEUR -397.8mEUR -446.8mEUR -502.0mEUR -563.9mEUR -633.4m+12.3%
    Less increase in working capitalEUR -18.8mEUR -21.1mEUR -23.7mEUR -26.6mEUR -29.9m+12.3%
    Free cashflow to firmEUR -211.0mEUR -237.1mEUR -266.3mEUR -299.1mEUR -336.0m-12.3%
    Discount factor0.96190.89010.82360.76210.7052-
    Present valueEUR -203.0mEUR -211.0mEUR -219.3mEUR -228.0mEUR -237.0m-3.9%
    Present Value Of The ForecastEUR -1.1bn

    Discount Rate

    Source shown per component. All overridable above.

    Risk-free rate4.20%USD assumption - no free live source available for this market (assumption)
    Equity risk premium6.50%Market assumption
    Beta1.072Reported 1.108, pulled toward 1.0 (Blume)
    Cost of equity11.17%Risk-free + beta x equity risk premium
    Cost of debt4.20%Floored at the risk-free rate (implied cost of debt was lower)
    Market capitalisationEUR 2.3bn60.3% of capital
    Total debtEUR 1.5bn39.7% of capital, book value as a proxy
    Tax rate20.0%Effective, capped at statutory
    WACC8.07%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 shareEUR -0.34

    178% of EV

    Forecast FCFF, final year
    EUR -336.0m
    Capex at depreciation, working capital in reinvestment
    EUR 270.8m
    Less reinvestment at g/ROIC (28.8% of NOPAT)
    EUR -78.1m
    Capitalised
    EUR 192.7m
    ROIC (reported)
    8.7%
    Terminal value, undiscounted
    EUR 3.5bn
    Terminal value, discounted
    EUR 2.5bn
    Enterprise value
    EUR 1.4bn
    Less net debt
    EUR 1.4bn
    Equity value
    EUR -42.4m

    Exit at 14.1x EBITDA

    Value per shareEUR 10.67

    140% of EV

    Terminal value, undiscounted
    EUR 5.5bn
    Terminal value, discounted
    EUR 3.9bn
    Enterprise value
    EUR 2.8bn
    Less net debt
    EUR 1.4bn
    Equity value
    EUR 1.3bn

    Sensitivity

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

    Long-run growth
    Discount rate1.50%2.00%2.50%3.00%3.50%
    6.07%9.7411.2613.1715.6819.13
    7.07%3.454.104.875.816.98
    8.07%-0.83-0.60-0.34-0.050.29
    9.07%-3.74-3.66-3.58-3.50-3.42
    10.07%-5.77-5.70-5.63-5.56-5.49

    Outlined: this model. Green text: above today's price of 17.28. 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 year12.3%32.3%+20.0pp
    Discount rate8.1%5.7%-2.3pp
    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.