2 - Simply wallstreet exciting long termShare Price vs. Fair Value
Below are the data sources, inputs and calculation used to determine the intrinsic value for Lake Resources.
ASX:LKE Discounted Cash Flow Data Sources Data Point Source Value Valuation Model 2 Stage Free Cash Flow to Equity Levered Free Cash Flow Average of 2 Analyst Estimates (S&P Global) See below Discount Rate (Cost of Equity) See below 6.4% Perpetual Growth Rate 5-Year Average of AU Long-Term Govt Bond Rate 1.8% An important part of a discounted cash flow is the discount rate, below we explain how it has been calculated.
Calculation of Discount Rate/ Cost of Equity for ASX:LKE Data Point Calculation/ Source Result Risk-Free Rate 5-Year Average of AU Long-Term Govt Bond Rate 1.8% Equity Risk Premium S&P Global 4.2% Metals and Mining Unlevered Beta Simply Wall St/ S&P Global 1.11 Re-levered Beta = 0.33 + [(0.66 * Unlevered beta) * (1 + (1 - tax rate) (Debt/Market Equity))]
= 0.33 + [(0.66 * 1.115) * (1 + (1 - 30.0%) (0%))]1.077 Levered Beta Levered Beta limited to 0.8 to 2.0
(practical range for a stable firm)1.077 Discount Rate/ Cost of Equity = Cost of Equity = Risk Free Rate + (Levered Beta * Equity Risk Premium)
= 1.83% + (1.077 * 4.24%)6.40%
Discounted Cash Flow Calculation forASX:LKEusing2 Stage Free Cash Flow to Equity
The calculations below outline how an intrinsic value for Lake Resources is arrived at by discounting future cash flows to their present value using the 2 stage method. We use analyst's estimates of cash flows going forward 10 years for the 1st stage, the 2nd stage assumes the company grows at a stable rate into perpetuity.
ASX:LKE DCF 1st Stage: Next 10 years cash flow forecast Levered FCF (AUD, Millions) Source Present Value
Discounted (@ 6.40%)2023 -580 Analyst x1 -545.14 2024 -401 Analyst x1 -354.24 2025 625 Analyst x1 518.93 2026 1,120.32 Est @ 79.25% 874.28 2027 1,747.97 Est @ 56.02% 1,282.1 2028 2,443.07 Est @ 39.77% 1,684.23 2029 3,136.55 Est @ 28.39% 2,032.33 2030 3,776.99 Est @ 20.42% 2,300.2 2031 4,337.58 Est @ 14.84% 2,482.82 2032 4,812.04 Est @ 10.94% 2,588.83 Present value of next 10 years cash flows A$12,864
ASX:LKE DCF 2nd Stage: Terminal Value Calculation Result Terminal Value FCF2032× (1 + g) ÷ (Discount Rate – g)
= A$4,812.043 x (1 + 1.83%) Ă· (6.40% - 1.83% )A$107,333.2 Present Value of Terminal Value = Terminal Value Ă· (1 + r)10
A$107,333 Ă· (1 + 6.40%)10A$57,744.27
ASX:LKE Total Equity Value Calculation Result Total Equity Value = Present value of next 10 years cash flows + Terminal Value
= A$12,864 + A$57,744A$70,608.27 Equity Value per Share
(AUD)= Total value / Shares Outstanding
= A$70,608 / 1,350A$52.31
ASX:LKE Discount to Share Price Calculation Result Value per share (AUD) From above. A$52.31 Current discount Discount to share price of A$0.89
= (A$52.31 - A$0.89) / A$52.3198.3% Learn more about our DCF calculations in Simply Wall St’sanalysis model.
- Forums
- ASX - By Stock
- LKE
- What is the Fair Price of LKE?
What is the Fair Price of LKE?, page-2
-
- There are more pages in this discussion • 37 more messages in this thread...
You’re viewing a single post only. To view the entire thread just sign in or Join Now (FREE)
Featured News
Add LKE (ASX) to my watchlist
(20min delay)
|
|||||
Last
3.9¢ |
Change
-0.001(2.50%) |
Mkt cap ! $65.07M |
Open | High | Low | Value | Volume |
4.0¢ | 4.1¢ | 3.9¢ | $27.14K | 679.6K |
Buyers (Bids)
No. | Vol. | Price($) |
---|---|---|
7 | 802318 | 3.8¢ |
Sellers (Offers)
Price($) | Vol. | No. |
---|---|---|
4.0¢ | 692499 | 4 |
View Market Depth
No. | Vol. | Price($) |
---|---|---|
7 | 802318 | 0.038 |
9 | 725864 | 0.037 |
14 | 837798 | 0.036 |
20 | 1309229 | 0.035 |
11 | 1298267 | 0.034 |
Price($) | Vol. | No. |
---|---|---|
0.040 | 692499 | 4 |
0.041 | 1064713 | 5 |
0.042 | 1477779 | 11 |
0.043 | 778883 | 5 |
0.044 | 709504 | 7 |
Last trade - 10.40am 05/09/2024 (20 minute delay) ? |
Featured News
LKE (ASX) Chart |