NPV valuation, page-5

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SA1588

817 Posts.

10/05/19

11:20

Post #: 38503411

Originally posted by DR SHARES: ↑
Here is a little discounted cashflow valuation using published figures; the 2024+ figures assumes no further growth and thus discounts the final net cashflow in perpetuity. We get a price of $7.66 in the basic case, $14.89 using a lower discount rate and $20.46 in an optimistic case.

Base case using current figures, 10% discount rate

$m revenue growth at 44% for 5 years then flat and rest in perpetuity

2018 2019 2020 2021 2022 2023 2024+ Total
Revenue 72 104 149 215 310 446 642
GM % 82% 82% 82% 82% 82% 82% 82%
GP 59 85 122 176 254 366 526
Fixed costs -72 -72 -72 -72 -72 -72 -72
Profit -13 13 50 104 182 294 454
tax 0 -4 -15 -31 -55 -88 -136
PL (cashflow) -13 9 35 73 127 205 318
Disc factor (10%) 0.91 0.83 0.75 0.68 0.62 0.56 0.1
NPV -12 8 27 50 79 116 3,181 3,448
shares on issue

450
share price

$7.66

Base case using current figures, 5% discount rate

$m revenue growth at 44% for 5 years then flat and rest in perpetuity

2018 2019 2020 2021 2022 2023 2024+ Total
Revenue 72 104 149 215 310 446 642
GM % 82% 82% 82% 82% 82% 82% 82%
GP 59 85 122 176 254 366 526
Fixed costs -72 -72 -72 -72 -72 -72 -72
Profit -13 13 50 104 182 294 454
tax 0 -4 -15 -31 -55 -88 -136
PL (cashflow) -13 9 35 73 127 205 318
Disc factor (10%) 0.95 0.91 0.86 0.82 0.78 0.75 0.05
NPV -12 8 30 60 100 153 6,362 6,701
shares on issue

450
share price

$14.89

optimistic case using optimistic figures, 5% discount rate

$m revenue growth at 50% for 5 years then flat and rest in perpetuity

2018 2019 2020 2021 2022 2023 2024+ Total
Revenue 72 108 162 243 365 547 820
GM % 85% 85% 85% 85% 85% 85% 85%
GP 61 92 138 207 310 465 697
Fixed costs -72 -72 -72 -72 -72 -72 -72
Profit -11 20 66 135 238 393 625
tax 0 -6 -20 -40 -71 -118 -188
PL (cashflow) -11 14 46 94 166 275 438
Disc factor (10%) 0.95 0.91 0.86 0.82 0.78 0.75 0.05
sqd 1 2 3 4 5 6

NPV -10 13 40 77 130 205 8,751 9,207
shares on issue

450
share price

$20.46
Expand
Would you mind producing a sensitivity to revenue growth. As a suggestion, using the 10% discount rate and providing revenue growth of say 20%, 40% and 60%.

NEA Price at posting: $3.56 Sentiment: Hold Disclosure: Held

1 Upvote

0 Great analysis

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Base case using current figures, 10% discount rate
$m	revenue growth at 44% for 5 years then flat and rest in perpetuity
	2018	2019	2020	2021	2022	2023	2024+	Total
Revenue	72	104	149	215	310	446	642
GM %	82%	82%	82%	82%	82%	82%	82%
GP	59	85	122	176	254	366	526
Fixed costs	-72	-72	-72	-72	-72	-72	-72
Profit	-13	13	50	104	182	294	454
tax	0	-4	-15	-31	-55	-88	-136
PL (cashflow)	-13	9	35	73	127	205	318
Disc factor (10%)	0.91	0.83	0.75	0.68	0.62	0.56	0.1
NPV	-12	8	27	50	79	116	3,181	3,448
shares on issue								450
share price								$7.66

Base case using current figures, 5% discount rate
$m	revenue growth at 44% for 5 years then flat and rest in perpetuity
	2018	2019	2020	2021	2022	2023	2024+	Total
Revenue	72	104	149	215	310	446	642
GM %	82%	82%	82%	82%	82%	82%	82%
GP	59	85	122	176	254	366	526
Fixed costs	-72	-72	-72	-72	-72	-72	-72
Profit	-13	13	50	104	182	294	454
tax	0	-4	-15	-31	-55	-88	-136
PL (cashflow)	-13	9	35	73	127	205	318
Disc factor (10%)	0.95	0.91	0.86	0.82	0.78	0.75	0.05
NPV	-12	8	30	60	100	153	6,362	6,701
shares on issue								450
share price								$14.89

optimistic case using optimistic figures, 5% discount rate
$m	revenue growth at 50% for 5 years then flat and rest in perpetuity
	2018	2019	2020	2021	2022	2023	2024+	Total
Revenue	72	108	162	243	365	547	820
GM %	85%	85%	85%	85%	85%	85%	85%
GP	61	92	138	207	310	465	697
Fixed costs	-72	-72	-72	-72	-72	-72	-72
Profit	-11	20	66	135	238	393	625
tax	0	-6	-20	-40	-71	-118	-188
PL (cashflow)	-11	14	46	94	166	275	438
Disc factor (10%)	0.95	0.91	0.86	0.82	0.78	0.75	0.05
sqd	1	2	3	4	5	6
NPV	-10	13	40	77	130	205	8,751	9,207
shares on issue								450
share price								$20.46

NPV valuation, page-5

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