Flight Centre Limited (FLT)

Discount cash flow analysis

Sell Overvalued by 76.8%

5% margin of safety What's this?

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How does this work?

This is an interactive analyst report for Flight Centre 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.

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Values in $ millions
2008 2009 2010 2011 2012 2013 2014 2015
 
                 
               
 

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% $8.30 $8.26 $8.22
Terminal Growth% 0 $8.30 $8.26 $8.22
  +1% $8.30 $8.27 $8.23

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 $31.57 (overvalued by 11.49%) - 8 months ago
  • faisalsaif created a new valuation of $20.04 (undervalued by 10.72%) - over 7 years ago
  • faisalsaif created a new valuation of $4.84 (overvalued by 73.26%) - over 7 years ago
  • glenncoleman created a new valuation of $13.56 (overvalued by 25.08%) - over 7 years ago
  • glenncoleman created a new valuation of $13.65 (overvalued by 24.59%) - over 7 years ago
  • glenncoleman created a new valuation of $10.60 (overvalued by 41.44%) - over 7 years ago
  • GordonGekko created a new valuation of $8.26 (undervalued by 9.55%) - 8 years ago
  • westes created a new valuation of $4.76 (overvalued by 36.87%) - 8 years ago
  • GordonGekko created a new valuation of $19.95 (undervalued by 12.71%) - 9 years ago

Comments

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The boring details

All amounts in millions Figures
Enterprise Value: 2,730
Net Debt (Long-term borrowings less cash): -822
Equity Value: 751
Number of Shares Outstanding: 99,000,000
Calculated value per share: $8.26

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.