Origin Energy Limited (ORG)

Discount cash flow analysis

Buy Undervalued by 196.5%

5% margin of safety What's this?


How does this work?

This is an interactive analyst report for Origin Energy 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.

Values in $ millions
2009 2010 2011 2012 2013 2014 2015 2016

What will the revenues be in the future?

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

Sensitivity matrix

Discount Rate %

  -1% $14.51 $14.38 $14.26
Terminal Growth% 0 $14.57 $14.44 $14.31
  +1% $14.63 $14.50 $14.37

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 $5.90 (undervalued by 21.15%) - over 1 year ago
  • ankitaj created a new valuation of $4.95 (overvalued by 69.85%) - almost 8 years ago
  • ankitaj created a new valuation of $4.96 (overvalued by 69.79%) - almost 8 years ago
  • IceyDoctor created a new valuation of $4.63 (overvalued by 71.72%) - over 8 years ago
  • GordonGekko created a new valuation of $14.44 (overvalued by 1.5%) - over 8 years ago
  • gordonsk created a new valuation of $20.15 (undervalued by 42.4%) - almost 9 years ago
  • Sam created a new valuation of $10.75 (overvalued by 22.94%) - almost 10 years ago


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The boring details

All amounts in millions Figures
Enterprise Value: 6,813
Net Debt (Long-term borrowings less cash): 2,559
Equity Value: 12,804
Number of Shares Outstanding: 873,000,000
Calculated value per share: $14.44

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

Calcuation of EV


  • 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.



  • 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


  • 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.