You are welcome to make adjustments to boost the free cashflow figure.
I wouldn’t personally as if they ceased growth they would be in structural decline due to the occasional store closures.
What would you pay for a business that can grow its earnings by 10% per year on a long term basis? Perhaps 10 time earnings. This is ‘potentially’ what DSK could be valued at today if there was confidence in the base from which those earnings will start.
If they stopped investing in growth, what would you pay for a business that’s earnings might decline by 5% pa due to stroke attrition. Potentially 6 times earnings?
You (and others) have suggested DSK is worth 10 times earnings as a minimum. That is reasonable - but then you cannot ignore the cost of opening new stores, as this is necessary to achieve that valuation.
DSK SP $3 - what would it take?, page-24
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Last
58.0¢ |
Change
-0.015(2.52%) |
Mkt cap ! $36.11M | |||
| Open | High | Low | Value | Volume |
| 60.0¢ | 60.5¢ | 58.0¢ | $342.5K | 576.8K |
Buyers (Bids)
| No. | Vol. | Price($) |
|---|---|---|
| 2 | 13335 | 58.0¢ |
Sellers (Offers)
| Price($) | Vol. | No. |
|---|---|---|
| 59.5¢ | 38617 | 2 |
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| Last trade - 16.10pm 28/06/2024 (20 minute delay) ? |
| DSK (ASX) Chart |