Latest news with #IntegralDiagnostics'
Yahoo
28-04-2025
- Business
- Yahoo
Integral Diagnostics Limited (ASX:IDX) Shares Could Be 44% Below Their Intrinsic Value Estimate
Integral Diagnostics' estimated fair value is AU$4.08 based on 2 Stage Free Cash Flow to Equity Integral Diagnostics' AU$2.27 share price signals that it might be 44% undervalued Our fair value estimate is 29% higher than Integral Diagnostics' analyst price target of AU$3.15 Today we will run through one way of estimating the intrinsic value of Integral Diagnostics Limited (ASX:IDX) by projecting its future cash flows and then discounting them to today's value. We will use the Discounted Cash Flow (DCF) model on this occasion. Believe it or not, it's not too difficult to follow, as you'll see from our example! Companies can be valued in a lot of ways, so we would point out that a DCF is not perfect for every situation. If you want to learn more about discounted cash flow, the rationale behind this calculation can be read in detail in the Simply Wall St analysis model. Our free stock report includes 3 warning signs investors should be aware of before investing in Integral Diagnostics. Read for free now. We use what is known as a 2-stage model, which simply means we have two different periods of growth rates for the company's cash flows. Generally the first stage is higher growth, and the second stage is a lower growth phase. In the first stage we need to estimate the cash flows to the business over the next ten years. Where possible we use analyst estimates, but when these aren't available we extrapolate the previous free cash flow (FCF) from the last estimate or reported value. We assume companies with shrinking free cash flow will slow their rate of shrinkage, and that companies with growing free cash flow will see their growth rate slow, over this period. We do this to reflect that growth tends to slow more in the early years than it does in later years. A DCF is all about the idea that a dollar in the future is less valuable than a dollar today, and so the sum of these future cash flows is then discounted to today's value: 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 Levered FCF (A$, Millions) AU$20.0m AU$54.8m AU$59.8m AU$61.0m AU$64.0m AU$66.5m AU$68.9m AU$71.2m AU$73.4m AU$75.6m Growth Rate Estimate Source Analyst x4 Analyst x6 Analyst x6 Analyst x2 Analyst x2 Est @ 3.92% Est @ 3.56% Est @ 3.32% Est @ 3.14% Est @ 3.02% Present Value (A$, Millions) Discounted @ 6.5% AU$18.8 AU$48.3 AU$49.5 AU$47.4 AU$46.7 AU$45.5 AU$44.3 AU$42.9 AU$41.6 AU$40.2 ("Est" = FCF growth rate estimated by Simply Wall St)Present Value of 10-year Cash Flow (PVCF) = AU$425m We now need to calculate the Terminal Value, which accounts for all the future cash flows after this ten year period. For a number of reasons a very conservative growth rate is used that cannot exceed that of a country's GDP growth. In this case we have used the 5-year average of the 10-year government bond yield (2.7%) to estimate future growth. In the same way as with the 10-year 'growth' period, we discount future cash flows to today's value, using a cost of equity of 6.5%. Terminal Value (TV)= FCF2034 × (1 + g) ÷ (r – g) = AU$76m× (1 + 2.7%) ÷ (6.5%– 2.7%) = AU$2.1b Present Value of Terminal Value (PVTV)= TV / (1 + r)10= AU$2.1b÷ ( 1 + 6.5%)10= AU$1.1b 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$1.5b. The last step is to then divide the equity value by the number of shares outstanding. Compared to the current share price of AU$2.3, the company appears quite good value at a 44% 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. Now the most important inputs to a discounted cash flow are the discount rate, and of course, the actual 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 Integral Diagnostics 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 6.5%, which is based on a levered beta of 0.874. 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. View our latest analysis for Integral Diagnostics Strength Debt is well covered by cash flow. Weakness Interest payments on debt are not well covered. Dividend is low compared to the top 25% of dividend payers in the Healthcare market. Shareholders have been diluted in the past year. Opportunity Annual earnings are forecast to grow faster than the Australian market. Trading below our estimate of fair value by more than 20%. Significant insider buying over the past 3 months. Threat Dividends are not covered by earnings. Revenue is forecast to grow slower than 20% per year. 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. 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 instance, if the terminal value growth rate is adjusted slightly, it can dramatically alter the overall result. What is the reason for the share price sitting below the intrinsic value? For Integral Diagnostics, there are three additional elements you should assess: Risks: Be aware that Integral Diagnostics is showing 3 warning signs in our investment analysis , and 2 of those are a bit concerning... Future Earnings: How does IDX'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 Solid Businesses: Low debt, high returns on equity and good past performance are fundamental to a strong business. Why not explore our interactive list of stocks with solid business fundamentals to see if there are other companies you may not have considered! 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.
Yahoo
01-04-2025
- Business
- Yahoo
3 ASX Stocks Estimated To Be Up To 42.8% Below Intrinsic Value
Amidst recent market fluctuations, with Australian shares poised for a potential bounceback following one of the toughest trading days of 2025, investors are eyeing opportunities on the ASX. In such volatile times, identifying stocks that are perceived to be undervalued can be particularly appealing, offering potential value against current market conditions. Name Current Price Fair Value (Est) Discount (Est) Acrow (ASX:ACF) A$1.09 A$2.01 45.8% Nido Education (ASX:NDO) A$0.795 A$1.57 49.3% Nick Scali (ASX:NCK) A$15.69 A$27.51 43% Environmental Group (ASX:EGL) A$0.245 A$0.46 46.9% PolyNovo (ASX:PNV) A$1.165 A$2.12 44.9% Charter Hall Group (ASX:CHC) A$16.78 A$31.89 47.4% Genetic Signatures (ASX:GSS) A$0.475 A$0.88 45.8% SciDev (ASX:SDV) A$0.445 A$0.82 45.5% ReadyTech Holdings (ASX:RDY) A$2.60 A$5.13 49.3% Polymetals Resources (ASX:POL) A$0.87 A$1.69 48.6% Click here to see the full list of 40 stocks from our Undervalued ASX Stocks Based On Cash Flows screener. Below we spotlight a couple of our favorites from our exclusive screener. Overview: Integral Diagnostics Limited is a healthcare services company that provides diagnostic imaging services to medical professionals and patients in Australia and New Zealand, with a market cap of A$843.54 million. Operations: Revenue for Integral Diagnostics is primarily generated from the operation of diagnostic imaging facilities, amounting to A$491.32 million. Estimated Discount To Fair Value: 42.8% Integral Diagnostics (IDX) is trading at A$2.27, significantly below its estimated fair value of A$3.97, suggesting it may be undervalued based on cash flows. Despite a recent net loss of A$0.396 million for H1 2025, IDX's earnings are expected to grow substantially over the next three years at 40.2% per year, outpacing the Australian market's growth rate of 11.8%. However, interest payments are not well covered by earnings and private equity interest remains high following a drop in market value to A$837 million after recent results. Insights from our recent growth report point to a promising forecast for Integral Diagnostics' business outlook. Click to explore a detailed breakdown of our findings in Integral Diagnostics' balance sheet health report. Overview: James Hardie Industries plc manufactures and sells fiber cement, fiber gypsum, and cement bonded building products for construction applications across the United States, Australia, Europe, New Zealand, and the Philippines with a market cap of A$15.89 billion. Operations: The company's revenue segments are comprised of North America Fiber Cement at $2.88 billion, Asia Pacific Fiber Cement at $543.30 million, and Europe Building Products at $488 million. Estimated Discount To Fair Value: 34.4% James Hardie Industries, trading at A$36.98, is substantially below its estimated fair value of A$56.41, highlighting potential undervaluation based on cash flows. The company's earnings are projected to grow annually by 18.1%, outpacing the Australian market's 11.8% growth rate. Recent acquisition plans with The AZEK Company Inc., alongside a strategic partnership with David Weekley Homes, could enhance long-term growth prospects despite recent stable earnings performance and slight revenue decline year-over-year. Our growth report here indicates James Hardie Industries may be poised for an improving outlook. Click here to discover the nuances of James Hardie Industries with our detailed financial health report. Overview: Select Harvests Limited is an Australian company involved in the cultivation, processing, packaging, and sale of almonds and its by-products, with a market cap of A$724.75 million. Operations: The company's revenue is primarily derived from its almond segment, which generated A$337.29 million. Estimated Discount To Fair Value: 18.3% Select Harvests, trading at A$5.1, is undervalued compared to its fair value estimate of A$6.24 and offers significant earnings growth potential with a forecasted 34.3% annual increase, surpassing the Australian market's 11.8%. Despite recent shareholder dilution and large one-off items affecting earnings quality, revenue is expected to grow faster than the market at 9% annually. Recent executive changes include appointing Liam Nolan as CFO and Mark Rhys Davies as Joint Company Secretaries. The analysis detailed in our Select Harvests growth report hints at robust future financial performance. Navigate through the intricacies of Select Harvests with our comprehensive financial health report here. Discover the full array of 40 Undervalued ASX Stocks Based On Cash Flows right here. Are you invested in these stocks already? Keep abreast of every twist and turn by setting up a portfolio with Simply Wall St, where we make it simple for investors like you to stay informed and proactive. Simply Wall St is a revolutionary app designed for long-term stock investors, it's free and covers every market in the world. Explore high-performing small cap companies that haven't yet garnered significant analyst attention. Diversify your portfolio with solid dividend payers offering reliable income streams to weather potential market turbulence. Fuel your portfolio with companies showing strong growth potential, backed by optimistic outlooks both from analysts and management. 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:IDX ASX:JHX and ASX:SHV. Have feedback on this article? Concerned about the content? with us directly. Alternatively, email editorial-team@ Sign in to access your portfolio
Yahoo
27-03-2025
- Business
- Yahoo
Integral Diagnostics Limited's (ASX:IDX) top owners are retail investors with 50% stake, while 44% is held by institutions
Integral Diagnostics' significant retail investors ownership suggests that the key decisions are influenced by shareholders from the larger public A total of 25 investors have a majority stake in the company with 47% ownership Insiders have been buying lately The end of cancer? These 15 emerging AI stocks are developing tech that will allow early identification of life changing diseases like cancer and Alzheimer's. A look at the shareholders of Integral Diagnostics Limited (ASX:IDX) can tell us which group is most powerful. We can see that retail investors own the lion's share in the company with 50% ownership. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn). Institutions, on the other hand, account for 44% of the company's stockholders. Generally speaking, as a company grows, institutions will increase their ownership. Conversely, insiders often decrease their ownership over time. Let's take a closer look to see what the different types of shareholders can tell us about Integral Diagnostics. See our latest analysis for Integral Diagnostics Institutions typically measure themselves against a benchmark when reporting to their own investors, so they often become more enthusiastic about a stock once it's included in a major index. We would expect most companies to have some institutions on the register, especially if they are growing. As you can see, institutional investors have a fair amount of stake in Integral Diagnostics. This can indicate that the company has a certain degree of credibility in the investment community. However, it is best to be wary of relying on the supposed validation that comes with institutional investors. They too, get it wrong sometimes. It is not uncommon to see a big share price drop if two large institutional investors try to sell out of a stock at the same time. So it is worth checking the past earnings trajectory of Integral Diagnostics, (below). Of course, keep in mind that there are other factors to consider, too. We note that hedge funds don't have a meaningful investment in Integral Diagnostics. Our data shows that Challenger Limited is the largest shareholder with 5.4% of shares outstanding. In comparison, the second and third largest shareholders hold about 5.0% and 4.5% of the stock. On studying our ownership data, we found that 25 of the top shareholders collectively own less than 50% of the share register, implying that no single individual has a majority interest. While studying institutional ownership for a company can add value to your research, it is also a good practice to research analyst recommendations to get a deeper understand of a stock's expected performance. There are plenty of analysts covering the stock, so it might be worth seeing what they are forecasting, too. The definition of an insider can differ slightly between different countries, but members of the board of directors always count. Management ultimately answers to the board. However, it is not uncommon for managers to be executive board members, especially if they are a founder or the CEO. I generally consider insider ownership to be a good thing. However, on some occasions it makes it more difficult for other shareholders to hold the board accountable for decisions. Our most recent data indicates that insiders own less than 1% of Integral Diagnostics Limited. But they may have an indirect interest through a corporate structure that we haven't picked up on. It seems the board members have no more than AU$7.0m worth of shares in the AU$858m company. Many tend to prefer to see a board with bigger shareholdings. A good next step might be to take a look at this free summary of insider buying and selling. With a 50% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Integral Diagnostics. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run. We can see that Private Companies own 4.5%, of the shares on issue. It's hard to draw any conclusions from this fact alone, so its worth looking into who owns those private companies. Sometimes insiders or other related parties have an interest in shares in a public company through a separate private company. It's always worth thinking about the different groups who own shares in a company. But to understand Integral Diagnostics better, we need to consider many other factors. Consider for instance, the ever-present spectre of investment risk. We've identified 3 warning signs with Integral Diagnostics (at least 2 which are potentially serious) , and understanding them should be part of your investment process. Ultimately the future is most important. You can access this free report on analyst forecasts for the company. NB: Figures in this article are calculated using data from the last twelve months, which refer to the 12-month period ending on the last date of the month the financial statement is dated. This may not be consistent with full year annual report figures. 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.
Yahoo
02-03-2025
- Business
- Yahoo
Don't Buy Integral Diagnostics Limited (ASX:IDX) For Its Next Dividend Without Doing These Checks
Integral Diagnostics Limited (ASX:IDX) is about to trade ex-dividend in the next 3 days. The ex-dividend date is two business days before a company's record date in most cases, which is the date on which the company determines which shareholders are entitled to receive a dividend. The ex-dividend date is of consequence because whenever a stock is bought or sold, the trade can take two business days or more to settle. This means that investors who purchase Integral Diagnostics' shares on or after the 6th of March will not receive the dividend, which will be paid on the 7th of April. The company's next dividend payment will be AU$0.025 per share, on the back of last year when the company paid a total of AU$0.058 to shareholders. Last year's total dividend payments show that Integral Diagnostics has a trailing yield of 2.7% on the current share price of AU$2.13. Dividends are a major contributor to investment returns for long term holders, but only if the dividend continues to be paid. So we need to investigate whether Integral Diagnostics can afford its dividend, and if the dividend could grow. Check out our latest analysis for Integral Diagnostics If a company pays out more in dividends than it earned, then the dividend might become unsustainable - hardly an ideal situation. Integral Diagnostics paid out a disturbingly high 247% of its profit as dividends last year, which makes us concerned there's something we don't fully understand in the business. Yet cash flow is typically more important than profit for assessing dividend sustainability, so we should always check if the company generated enough cash to afford its dividend. Thankfully its dividend payments took up just 40% of the free cash flow it generated, which is a comfortable payout ratio. It's disappointing to see that the dividend was not covered by profits, but cash is more important from a dividend sustainability perspective, and Integral Diagnostics fortunately did generate enough cash to fund its dividend. If executives were to continue paying more in dividends than the company reported in profits, we'd view this as a warning sign. Extraordinarily few companies are capable of persistently paying a dividend that is greater than their profits. Click here to see the company's payout ratio, plus analyst estimates of its future dividends. When earnings decline, dividend companies become much harder to analyse and own safely. Investors love dividends, so if earnings fall and the dividend is reduced, expect a stock to be sold off heavily at the same time. Integral Diagnostics's earnings have collapsed faster than Wile E Coyote's schemes to trap the Road Runner; down a tremendous 35% a year over the past five years. The main way most investors will assess a company's dividend prospects is by checking the historical rate of dividend growth. Integral Diagnostics has delivered 4.2% dividend growth per year on average over the past nine years. That's intriguing, but the combination of growing dividends despite declining earnings can typically only be achieved by paying out a larger percentage of profits. Integral Diagnostics is already paying out a high percentage of its income, so without earnings growth, we're doubtful of whether this dividend will grow much in the future. Has Integral Diagnostics got what it takes to maintain its dividend payments? It's never great to see earnings per share declining, especially when a company is paying out 247% of its profit as dividends, which we feel is uncomfortably high. Yet cashflow was much stronger, which makes us wonder if there are some large timing issues in Integral Diagnostics's cash flows, or perhaps the company has written down some assets aggressively, reducing its income. It's not that we think Integral Diagnostics is a bad company, but these characteristics don't generally lead to outstanding dividend performance. With that being said, if you're still considering Integral Diagnostics as an investment, you'll find it beneficial to know what risks this stock is facing. For instance, we've identified 4 warning signs for Integral Diagnostics (2 are significant) you should be aware of. A common investing mistake is buying the first interesting stock you see. Here you can find a full 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
