Latest news with #ConnexionMobility
Yahoo
14-03-2025
- Business
- Yahoo
Estimating The Intrinsic Value Of Connexion Mobility Ltd (ASX:CXZ)
Connexion Mobility's estimated fair value is AU$0.036 based on 2 Stage Free Cash Flow to Equity Current share price of AU$0.03 suggests Connexion Mobility is potentially trading close to its fair value In this article we are going to estimate the intrinsic value of Connexion Mobility Ltd (ASX:CXZ) by projecting its future cash flows and then discounting them to today's value. We will take advantage of the Discounted Cash Flow (DCF) model for this purpose. Don't get put off by the jargon, the math behind it is actually quite straightforward. Remember though, that there are many ways to estimate a company's value, and a DCF is just one method. Anyone interested in learning a bit more about intrinsic value should have a read of the Simply Wall St analysis model. Check out our latest analysis for Connexion Mobility We're using the 2-stage growth model, which simply means we take in account two stages of company's growth. In the initial period the company may have a higher growth rate and the second stage is usually assumed to have a stable growth rate. To start off with, we need to estimate the next ten years of cash flows. Seeing as no analyst estimates of free cash flow are available to us, we have extrapolate the previous free cash flow (FCF) from the company's last reported value. We assume companies with shrinking free cash flow will slow their rate of shrinkage, and that companies with growing free cash flow will see their growth rate slow, over this period. We do this to reflect that growth tends to slow more in the early years than it does in later years. A DCF is all about the idea that a dollar in the future is less valuable than a dollar today, so we discount the value of these future cash flows to their estimated value in today's dollars: 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 Levered FCF ($, Millions) US$1.34m US$1.17m US$1.08m US$1.03m US$1.00m US$994.0k US$995.8k US$1.01m US$1.02m US$1.04m Growth Rate Estimate Source Est @ -19.01% Est @ -12.48% Est @ -7.92% Est @ -4.72% Est @ -2.48% Est @ -0.92% Est @ 0.18% Est @ 0.95% Est @ 1.49% Est @ 1.86% Present Value ($, Millions) Discounted @ 7.3% US$1.2 US$1.0 US$0.9 US$0.8 US$0.7 US$0.6 US$0.6 US$0.6 US$0.5 US$0.5 ("Est" = FCF growth rate estimated by Simply Wall St)Present Value of 10-year Cash Flow (PVCF) = US$7.5m After calculating the present value of future cash flows in the initial 10-year period, we need to calculate the Terminal Value, which accounts for all future cash flows beyond the first stage. The Gordon Growth formula is used to calculate Terminal Value at a future annual growth rate equal to the 5-year average of the 10-year government bond yield of 2.7%. We discount the terminal cash flows to today's value at a cost of equity of 7.3%. Terminal Value (TV)= FCF2034 × (1 + g) ÷ (r – g) = US$1.0m× (1 + 2.7%) ÷ (7.3%– 2.7%) = US$23m Present Value of Terminal Value (PVTV)= TV / (1 + r)10= US$23m÷ ( 1 + 7.3%)10= US$11m The total value, or equity value, is then the sum of the present value of the future cash flows, which in this case is US$19m. In the final step we divide the equity value by the number of shares outstanding. Relative to the current share price of AU$0.03, the company appears about fair value at a 17% discount to where the stock price trades currently. Remember though, that this is just an approximate valuation, and like any complex formula - garbage in, garbage out. We would point out that the most important inputs to a discounted cash flow are the discount rate and of course the actual cash flows. If you don't agree with these result, have a go at the calculation yourself and play with the assumptions. The DCF also does not consider the possible cyclicality of an industry, or a company's future capital requirements, so it does not give a full picture of a company's potential performance. Given that we are looking at Connexion Mobility as potential shareholders, the cost of equity is used as the discount rate, rather than the cost of capital (or weighted average cost of capital, WACC) which accounts for debt. In this calculation we've used 7.3%, which is based on a levered beta of 1.062. Beta is a measure of a stock's volatility, compared to the market as a whole. We get our beta from the industry average beta of globally comparable companies, with an imposed limit between 0.8 and 2.0, which is a reasonable range for a stable business. Strength Currently debt free. Weakness Earnings declined over the past year. Opportunity Current share price is below our estimate of fair value. Lack of analyst coverage makes it difficult to determine CXZ's earnings prospects. Threat No apparent threats visible for CXZ. Valuation is only one side of the coin in terms of building your investment thesis, and it is only one of many factors that you need to assess for a company. It's not possible to obtain a foolproof valuation with a DCF model. Preferably you'd apply different cases and assumptions and see how they would impact the company's valuation. For example, changes in the company's cost of equity or the risk free rate can significantly impact the valuation. For Connexion Mobility, we've put together three further factors you should further examine: Risks: You should be aware of the 2 warning signs for Connexion Mobility (1 shouldn't be ignored!) we've uncovered before considering an investment in the company. Other High Quality Alternatives: Do you like a good all-rounder? Explore our interactive list of high quality stocks to get an idea of what else is out there you may be missing! Other Top Analyst Picks: Interested to see what the analysts are thinking? Take a look at our interactive list of analysts' top stock picks to find out what they feel might have an attractive future outlook! PS. The Simply Wall St app conducts a discounted cash flow valuation for every stock on the ASX every day. If you want to find the calculation for other stocks just search here. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Sign in to access your portfolio
Yahoo
27-01-2025
- Automotive
- Yahoo
Connexion Mobility ties up with Modives on insurance verification
Automotive company Connexion Mobility has teamed up with insurance verification and monitoring company Modives to bring identity and insurance verification to the automotive space. Connexion Mobility's network of dealership customers can now improve their risk management for courtesy fleets. According to the company, outdated verification processes result in various costs including vehicle downtime, repair expenses, business interruptions and liability risks. Moreover, recent updates to the Federal Trade Commission's Safeguards Rule now impose new compliance obligations on auto dealerships, OEMs and lenders. Failure to meet these requirements, including proper verification of insurance coverage, can lead to fines of up to $51,744 per violation. CheckMy Driver, Modives' patent-pending insurance verification app, along with CheckMy ID represent a secure, automated, real-time solution for insurance and identity verification, meeting new compliance requirements. The system helps protect customer data and reduce dealership liability. This partnership integrates CheckMy Driver and CheckMy ID into Connexion Mobility's fleet and rental management platform to improve operational efficiency for dealers. The integration is said to enhance efficiency in operations, reduce risk and result in better consumer experience with Express Check-in and a higher dealer Customer Satisfaction Index (CSI) rating. By using insurance and identity data, dealerships can identify sales opportunities for upgrades, new cars and products such as warranties and vehicle service contracts (VSCs). Connexion Mobility CEO Aaryn Nania said: 'By turning routine transactions into strategic opportunities, we are not only enhancing customer experiences and protecting OEMs and dealers' businesses but also helping our dealers uncover new revenue potential. CheckMy Driver and CheckMy ID are the perfect complement to our mission of delivering valuable innovation to the automotive industry.' Modives CEO Fred Waite stated: 'By integrating CheckMy Driver and CheckMy ID into their dealers' workflows, Connexion not only empowers dealers to mitigate risks but also leverages the resulting unique customer data for revenue-generating activity.' "Connexion Mobility ties up with Modives on insurance verification " was originally created and published by Life Insurance International, a GlobalData owned brand. The information on this site has been included in good faith for general informational purposes only. It is not intended to amount to advice on which you should rely, and we give no representation, warranty or guarantee, whether express or implied as to its accuracy or completeness. You must obtain professional or specialist advice before taking, or refraining from, any action on the basis of the content on our site.
