Latest news with #DuskGroupLimited
Yahoo
01-05-2025
- Business
- Yahoo
Calculating The Intrinsic Value Of Dusk Group Limited (ASX:DSK)
The projected fair value for Dusk Group is AU$1.35 based on 2 Stage Free Cash Flow to Equity Dusk Group's AU$1.11 share price indicates it is trading at similar levels as its fair value estimate Peers of Dusk Group are currently trading on average at a 51% premium In this article we are going to estimate the intrinsic value of Dusk Group Limited (ASX:DSK) by projecting its future cash flows and then discounting them to today's value. One way to achieve this is by employing the Discounted Cash Flow (DCF) model. Believe it or not, it's not too difficult to follow, as you'll see from our example! We would caution that there are many ways of valuing a company and, like the DCF, each technique has advantages and disadvantages in certain scenarios. Anyone interested in learning a bit more about intrinsic value should have a read of the Simply Wall St analysis model. This technology could replace computers: discover the 20 stocks are working to make quantum computing a reality. We use what is known as a 2-stage model, which simply means we have two different periods of growth rates for the company's cash flows. Generally the first stage is higher growth, and the second stage is a lower growth phase. To start off with, we need to estimate the next ten years of cash flows. Where possible we use analyst estimates, but when these aren't available we extrapolate the previous free cash flow (FCF) from the last estimate or reported value. We assume companies with shrinking free cash flow will slow their rate of shrinkage, and that companies with growing free cash flow will see their growth rate slow, over this period. We do this to reflect that growth tends to slow more in the early years than it does in later years. A DCF is all about the idea that a dollar in the future is less valuable than a dollar today, so we need to discount the sum of these future cash flows to arrive at a present value estimate: 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 Levered FCF (A$, Millions) AU$6.80m AU$9.30m AU$11.4m AU$8.19m AU$6.64m AU$5.82m AU$5.36m AU$5.11m AU$4.99m AU$4.94m Growth Rate Estimate Source Analyst x1 Analyst x1 Analyst x1 Est @ -28.16% Est @ -18.89% Est @ -12.40% Est @ -7.86% Est @ -4.68% Est @ -2.45% Est @ -0.90% Present Value (A$, Millions) Discounted @ 8.7% AU$6.3 AU$7.9 AU$8.9 AU$5.9 AU$4.4 AU$3.5 AU$3.0 AU$2.6 AU$2.4 AU$2.1 ("Est" = FCF growth rate estimated by Simply Wall St)Present Value of 10-year Cash Flow (PVCF) = AU$47m The second stage is also known as Terminal Value, this is the business's cash flow after 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 8.7%. Terminal Value (TV)= FCF2034 × (1 + g) ÷ (r – g) = AU$4.9m× (1 + 2.7%) ÷ (8.7%– 2.7%) = AU$85m Present Value of Terminal Value (PVTV)= TV / (1 + r)10= AU$85m÷ ( 1 + 8.7%)10= AU$37m The total value, or equity value, is then the sum of the present value of the future cash flows, which in this case is AU$84m. In the final step we divide the equity value by the number of shares outstanding. Relative to the current share price of AU$1.1, the company appears about fair value at a 18% discount to where the stock price trades currently. Valuations are imprecise instruments though, rather like a telescope - move a few degrees and end up in a different galaxy. Do keep this in mind. The calculation above is very dependent on two assumptions. The first is the discount rate and the other is the cash flows. You don't have to agree with these inputs, I recommend redoing the calculations yourself and playing with them. 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 Dusk Group 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 8.7%, which is based on a levered beta of 1.372. 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. See our latest analysis for Dusk Group Strength Currently debt free. Weakness Earnings declined over the past year. Dividend is low compared to the top 25% of dividend payers in the Specialty Retail market. Opportunity Annual earnings are forecast to grow faster than the Australian market. Good value based on P/E ratio and estimated fair value. Threat Dividends are not covered by earnings. Whilst important, the DCF calculation shouldn't be the only metric you look at when researching a company. The DCF model is not a perfect stock valuation tool. Instead the best use for a DCF model is to test certain assumptions and theories to see if they would lead to the company being undervalued or overvalued. For example, changes in the company's cost of equity or the risk free rate can significantly impact the valuation. For Dusk Group, we've put together three additional elements you should assess: Risks: To that end, you should be aware of the 2 warning signs we've spotted with Dusk Group . Future Earnings: How does DSK's growth rate compare to its peers and the wider market? Dig deeper into the analyst consensus number for the upcoming years by interacting with our free analyst growth expectation chart. 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! 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
01-04-2025
- Business
- Yahoo
ASX Penny Stocks With Market Caps Over A$60M
The Australian market is poised for a rebound after a challenging start to the week, with ASX 200 futures indicating a potential rise alongside positive movements on Wall Street. In such fluctuating markets, discerning investors often look beyond established giants to explore opportunities in less conventional areas like penny stocks. Although the term may seem outdated, penny stocks represent smaller or newer companies that can offer intriguing prospects for growth and value when backed by strong financials and solid fundamentals. Name Share Price Market Cap Financial Health Rating CTI Logistics (ASX:CLX) A$1.61 A$125.6M ★★★★☆☆ Accent Group (ASX:AX1) A$1.795 A$1.02B ★★★★☆☆ EZZ Life Science Holdings (ASX:EZZ) A$1.55 A$73.12M ★★★★★★ IVE Group (ASX:IGL) A$2.39 A$369.24M ★★★★★☆ GTN (ASX:GTN) A$0.61 A$119.79M ★★★★★★ West African Resources (ASX:WAF) A$2.32 A$2.64B ★★★★★★ Bisalloy Steel Group (ASX:BIS) A$3.18 A$150.89M ★★★★★★ Regal Partners (ASX:RPL) A$2.29 A$768.06M ★★★★★★ NRW Holdings (ASX:NWH) A$2.75 A$1.26B ★★★★★☆ LaserBond (ASX:LBL) A$0.38 A$44.59M ★★★★★★ Click here to see the full list of 966 stocks from our ASX Penny Stocks screener. Here we highlight a subset of our preferred stocks from the screener. Simply Wall St Financial Health Rating: ★★★★☆☆ Overview: Canyon Resources Limited, along with its subsidiaries, focuses on the exploration and development of mineral properties in West Africa and has a market capitalization of A$327.10 million. Operations: Canyon Resources Limited does not report any specific revenue segments. Market Cap: A$327.1M Canyon Resources is a pre-revenue company focused on developing its Minim Martap Bauxite Project in Cameroon. Despite having less than a year of cash runway, the company is debt-free and has short-term assets exceeding liabilities by A$14.6 million. Recent developments include its addition to the S&P/ASX All Ordinaries and Emerging Companies Indexes, reflecting growing market recognition. The upcoming Definitive Feasibility Study aims to confirm project viability, with strategic partnerships being pursued for long-term sales agreements. However, management changes indicate an evolving leadership team as Canyon progresses towards potential production by 2026. Get an in-depth perspective on Canyon Resources' performance by reading our balance sheet health report here. Evaluate Canyon Resources' historical performance by accessing our past performance report. Simply Wall St Financial Health Rating: ★★★★★★ Overview: Dusk Group Limited operates as a retailer of scented and unscented candles, home decor, home fragrances, and gift solutions in Australia with a market cap of A$69.74 million. Operations: The company's revenue is primarily generated from retail sales in the home fragrances and accessories segment, amounting to A$136.31 million. Market Cap: A$69.74M Dusk Group Limited, with a market cap of A$69.74 million, has shown resilience in the competitive retail sector despite recent challenges. The company reported half-year sales of A$87.39 million, an increase from the previous year, and net income rose to A$9.55 million. However, earnings growth has been negative over the past year at -9.7%, and profit margins have slightly decreased to 4.2%. Dusk is debt-free and maintains strong short-term asset coverage over liabilities (A$56.5M vs A$36.2M). Recently announced dividends highlight shareholder returns but remain inadequately covered by earnings due to profitability pressures. Click to explore a detailed breakdown of our findings in Dusk Group's financial health report. Examine Dusk Group's earnings growth report to understand how analysts expect it to perform. Simply Wall St Financial Health Rating: ★★★★★★ Overview: Perenti Limited is a global mining services company with a market capitalization of A$1.24 billion. Operations: Perenti's revenue is primarily derived from Contract Mining Services, which accounts for A$2.50 billion, followed by Drilling Services at A$750.65 million and Mining Services and Idoba contributing A$229.77 million. Market Cap: A$1.24B Perenti Limited, with a market cap of A$1.24 billion, is navigating the mining services sector with mixed results. While its debt is well covered by operating cash flow and short-term assets exceed liabilities, recent earnings have declined compared to the previous year. The company has shown significant profit growth over five years but faced negative earnings growth in the past year. Return on equity remains low at 5.6%, and profit margins have dipped to 2.5%. Despite these challenges, Perenti increased its dividend from 2 cents to 3 cents per share, reflecting confidence in future cash generation potential. Jump into the full analysis health report here for a deeper understanding of Perenti. Explore Perenti's analyst forecasts in our growth report. Discover the full array of 966 ASX Penny Stocks right here. Ready To Venture Into Other Investment Styles? We've found 21 US stocks that are forecast to pay a dividend yeild of over 6% next year. See the full list for free. This 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. Companies discussed in this article include ASX:CAY ASX:DSK and ASX:PRN. Have feedback on this article? Concerned about the content? with us directly. Alternatively, email editorial-team@
Yahoo
28-02-2025
- Business
- Yahoo
Dusk Group (ASX:DSK) Is Increasing Its Dividend To A$0.10
Dusk Group Limited (ASX:DSK) will increase its dividend from last year's comparable payment on the 27th of March to A$0.10. Based on this payment, the dividend yield for the company will be 4.9%, which is fairly typical for the industry. View our latest analysis for Dusk Group While it is always good to see a solid dividend yield, we should also consider whether the payment is feasible. Before this announcement, Dusk Group was paying out 70% of earnings, but a comparatively small 13% of free cash flows. In general, cash flows are more important than earnings, so we are comfortable that the dividend will be sustainable going forward, especially with so much cash left over for reinvestment. Looking forward, earnings per share is forecast to rise by 96.6% over the next year. If the dividend continues on this path, the payout ratio could be 56% by next year, which we think can be pretty sustainable going forward. Even in its short history, we have seen the dividend cut. The annual payment during the last 4 years was A$0.30 in 2021, and the most recent fiscal year payment was A$0.065. Dividend payments have fallen sharply, down 78% over that time. A company that decreases its dividend over time generally isn't what we are looking for. With a relatively unstable dividend, and a poor history of shrinking dividends, it's even more important to see if EPS is growing. Dusk Group's EPS has fallen by approximately 11% per year during the past five years. Such rapid declines definitely have the potential to constrain dividend payments if the trend continues into the future. However, the next year is actually looking up, with earnings set to rise. We would just wait until it becomes a pattern before getting too excited. In summary, while it's always good to see the dividend being raised, we don't think Dusk Group's payments are rock solid. The company is generating plenty of cash, which could maintain the dividend for a while, but the track record hasn't been great. We don't think Dusk Group is a great stock to add to your portfolio if income is your focus. Market movements attest to how highly valued a consistent dividend policy is compared to one which is more unpredictable. However, there are other things to consider for investors when analysing stock performance. For example, we've picked out 2 warning signs for Dusk Group that investors should know about before committing capital to this stock. If you are a dividend investor, you might also want to look at our curated list of high yield dividend stocks. 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
