Methven Limited (MVN)

Discount cash flow analysis

Sell Overvalued by 48.5%

5% margin of safety What's this?

close

How does this work?

This is an interactive analyst report for Methven Limited, 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.

Spacer
Values in $ millions
2012 2013 2014 2015 2016 2017 2018 2019
 
                 
               
 

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% $0.71 $0.70 $0.68
Terminal Growth% 0 $0.71 $0.70 $0.69
  +1% $0.72 $0.70 $0.69

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

  • DarrylLundy created a new valuation of $0.70 (overvalued by 41.18%) - almost 9 years ago
  • fazza created a new valuation of $1.61 (overvalued by 8.0%) - over 10 years ago
  • GordonGekko created a new valuation of $1.65 (undervalued by 17.86%) - almost 12 years ago
  • GordonGekko created a new valuation of $1.67 (undervalued by 28.46%) - almost 12 years ago
  • GordonGekko created a new valuation of $1.27 (undervalued by 27.0%) - 12 years ago
  • GordonGekko created a new valuation of $2.03 (undervalued by 35.33%) - 13 years ago
  • KiwiEMH created a new valuation of $1.44 (overvalued by 1.37%) - 13 years ago

Comments

No comments yet. Login to comment.

The boring details

All amounts in millions Figures
Enterprise Value: 109
Net Debt (Long-term borrowings less cash): 19
Equity Value: 79
Number of Shares Outstanding: 66,000,000
Calculated value per share: $0.70

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.