Where did you see Brian Hill hold 18% stake? On Tikr and interactivebroker, I dont see this. Only Simply wall st is showing Brian Hill owns 18% stake. How to know which is correct?
Thank you for the analysis and for sharing it. It's thorough and identifies drivers of growth correctly. It's maybe also worth considering that they have some 600 million in capital leases (or 4.5 per share). These are debt equivalents I would take out of your estimate of enterprise value (leases as debt have prior rights compared to common equity). Regarding the terminal multiple, based on data I collected, over 2006 – 2022 value between 10 and 12 (10.8 to be exact) seems like a fair estimate. Still the same (https://pages.stern.nyu.edu/~adamodar/New_Home_Page/dataarchived.html) data would suggest cost of capital of 8% so those two level out in a way 🙂 Keep up the good work! 🍀
Appreciate the effort here and the hard work put in. Question on the actual calculation though as I come out with drastically different valuation and I believe it's how the terminal value is being calculated.
When doing the terminal value for a a DCF, you just take the FCF or your $433 in your terminal year divided by your discount rate less rate of growth which you then present value back. This would give $6,185M for the terminal value which is then discounted back to $3,840M using your 10% discount rate for 5 years.
You don't normally do an EBITDA mutiple in 5 years time on the exit rate. Is this a different valuation method?
When calculating the terminal value like this, the share price goes to $40.93/share which actually is pretty close to where the stock is now.
Hi, Good research, Thank you for sharing.
Where did you see Brian Hill hold 18% stake? On Tikr and interactivebroker, I dont see this. Only Simply wall st is showing Brian Hill owns 18% stake. How to know which is correct?
Thank you for the analysis and for sharing it. It's thorough and identifies drivers of growth correctly. It's maybe also worth considering that they have some 600 million in capital leases (or 4.5 per share). These are debt equivalents I would take out of your estimate of enterprise value (leases as debt have prior rights compared to common equity). Regarding the terminal multiple, based on data I collected, over 2006 – 2022 value between 10 and 12 (10.8 to be exact) seems like a fair estimate. Still the same (https://pages.stern.nyu.edu/~adamodar/New_Home_Page/dataarchived.html) data would suggest cost of capital of 8% so those two level out in a way 🙂 Keep up the good work! 🍀
Appreciate the effort here and the hard work put in. Question on the actual calculation though as I come out with drastically different valuation and I believe it's how the terminal value is being calculated.
When doing the terminal value for a a DCF, you just take the FCF or your $433 in your terminal year divided by your discount rate less rate of growth which you then present value back. This would give $6,185M for the terminal value which is then discounted back to $3,840M using your 10% discount rate for 5 years.
You don't normally do an EBITDA mutiple in 5 years time on the exit rate. Is this a different valuation method?
When calculating the terminal value like this, the share price goes to $40.93/share which actually is pretty close to where the stock is now.