ASX Ltd. (ASX)

Discount cash flow analysis

Buy Undervalued by 43.4%

5% margin of safety What's this?

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How does this work?

This is an interactive analyst report for ASX Ltd., based on a discounted cash flow valuation approach.

You can modify the assumptions and the valuation will be updated automatically. You can also save and share your valuation.

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Values in $ millions
2007 2008 2009 2010 2011 2012 2013 2014
 
                 
               
 

What will the revenues be in the future?

Growth beyond year three is driven by the terminal growth rate.

Sensitivity matrix

   
-1% 		Discount Rate %
0%
1%
  -1% $42.22 $42.04 $41.86
Terminal Growth% 0 $42.27 $42.08 $41.90
  +1% $42.31 $42.12 $41.94

How does a change in discount rate or terminal growth affect valuation?

This table shows the sensitivity of the valuation to two key variables - the discount rate and the terminal growth rate

Valuations and comments

  • Valuecruncher created a new valuation of $34.74 (undervalued by 18.36%) - 4 hours ago
  • raj6690 created a new valuation of $29.67 (overvalued by 14.52%) - over 2 years ago
  • markdev2002 created a new valuation of $55.42 (undervalued by 74.39%) - over 3 years ago
  • kiwipiet created a new valuation of $57.23 (undervalued by 92.37%) - over 3 years ago
  • kiwipiet created a new valuation of $57.23 (undervalued by 92.37%) - over 3 years ago
  • kiwipiet created a new valuation of $56.24 (undervalued by 89.04%) - over 3 years ago
  • gordonsk created a new valuation of $56.24 (undervalued by 94.6%) - over 3 years ago
  • GordonGekko created a new valuation of $56.24 (undervalued by 91.68%) - over 3 years ago
  • GordonGekko created a new valuation of $42.08 (undervalued by 13.67%) - over 4 years ago

Comments

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The boring details

All amounts in millions Figures
Enterprise Value: -1,532
Net Debt (Long-term borrowings less cash): -6,551
Equity Value: 6,330
Number of Shares Outstanding: 171,000,000
Calculated value per share: $42.08

Enterprise Value is the present value of the post-tax cash flows for a business into the future.

Calcuation of EV

Where:

  • C1, C2, C3 - the cash flow in period 1, 2, 3, ...
  • r - the discount rate

To capture the cash flows into the future a terminal value is calculated via a perpetuity calculation -
based on the final years forecast post-tax free cash flow.

Perpetuity

Where:

  • Cn - the cash flow in the final forecast period.
  • LTG - the long-term growth rate
  • r - the discount rate
  • g - the terminal growth rate

The Capital Asset Pricing Model (CAPM) is used to determine the equity component in the discount rate.

CAPM model

Where:

  • rt - the risk free rate
  • t - the tax rate
  • B - the beta of the company
  • MRP - the Market Risk Premium

Valuecruncher uses an estimate of Weighted Average Cost of Capital (WACC) to determine the discount rate in the calculation.