Latest news with #TasmeaLimited
Yahoo
05-07-2025
- Business
- Yahoo
Calculating The Fair Value Of Tasmea Limited (ASX:TEA)
Using the 2 Stage Free Cash Flow to Equity, Tasmea fair value estimate is AU$3.55 With AU$3.51 share price, Tasmea appears to be trading close to its estimated fair value Analyst price target for TEA is AU$4.40, which is 24% above our fair value estimate How far off is Tasmea Limited (ASX:TEA) from its intrinsic value? Using the most recent financial data, we'll take a look at whether the stock is fairly priced by estimating the company's future cash flows and discounting them to their present value. One way to achieve this is by employing the Discounted Cash Flow (DCF) model. Models like these may appear beyond the comprehension of a lay person, but they're fairly easy to follow. We generally believe that a company's value is the present value of all of the cash it will generate in the future. However, a DCF is just one valuation metric among many, and it is not without flaws. 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. AI is about to change healthcare. These 20 stocks are working on everything from early diagnostics to drug discovery. The best part - they are all under $10bn in marketcap - there is still time to get in early. We're using the 2-stage growth model, which simply means we take in account two stages of company's growth. In the initial period the company may have a higher growth rate and the second stage is usually assumed to have a stable growth rate. To start off with, we need to estimate the next ten years of cash flows. Where possible we use analyst estimates, but when these aren't available we extrapolate the previous free cash flow (FCF) from the last estimate or reported value. We assume companies with shrinking free cash flow will slow their rate of shrinkage, and that companies with growing free cash flow will see their growth rate slow, over this period. We do this to reflect that growth tends to slow more in the early years than it does in later years. Generally we assume that a dollar today is more valuable than a dollar in the future, so we discount the value of these future cash flows to their estimated value in today's dollars: 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 Levered FCF (A$, Millions) AU$64.5m AU$73.6m AU$53.0m AU$50.1m AU$48.7m AU$48.1m AU$48.1m AU$48.6m AU$49.3m AU$50.3m Growth Rate Estimate Source Analyst x2 Analyst x2 Analyst x1 Est @ -5.43% Est @ -2.92% Est @ -1.16% Est @ 0.07% Est @ 0.94% Est @ 1.54% Est @ 1.96% Present Value (A$, Millions) Discounted @ 7.9% AU$59.8 AU$63.3 AU$42.2 AU$37.0 AU$33.3 AU$30.5 AU$28.3 AU$26.5 AU$24.9 AU$23.6 ("Est" = FCF growth rate estimated by Simply Wall St)Present Value of 10-year Cash Flow (PVCF) = AU$369m The second stage is also known as Terminal Value, this is the business's cash flow after the first stage. 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 (2.9%) 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 7.9%. Terminal Value (TV)= FCF2035 × (1 + g) ÷ (r – g) = AU$50m× (1 + 2.9%) ÷ (7.9%– 2.9%) = AU$1.1b Present Value of Terminal Value (PVTV)= TV / (1 + r)10= AU$1.1b÷ ( 1 + 7.9%)10= AU$493m 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$863m. In the final step we divide the equity value by the number of shares outstanding. Compared to the current share price of AU$3.5, the company appears about fair value at a 1.1% 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. 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 Tasmea 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 7.9%, which is based on a levered beta of 1.136. 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. Check out our latest analysis for Tasmea Strength Earnings growth over the past year exceeded the industry. Debt is well covered by earnings and cashflows. Weakness Dividend is low compared to the top 25% of dividend payers in the Construction market. Opportunity Annual earnings are forecast to grow faster than the Australian market. Current share price is below our estimate of fair value. Threat Dividends are not covered by cash flow. Revenue is forecast to grow slower than 20% per year. Whilst important, the DCF calculation ideally won't be the sole piece of analysis you scrutinize for a company. The DCF model is not a perfect stock valuation tool. 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 Tasmea, there are three relevant factors you should further examine: Risks: For instance, we've identified 2 warning signs for Tasmea that you should be aware of. Future Earnings: How does TEA'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. — Investing narratives with Fair Values Suncorp's Next Chapter: Insurance-Only and Ready to Grow By Robbo – Community Contributor Fair Value Estimated: A$22.83 · 0.1% Overvalued Thyssenkrupp Nucera Will Achieve Double-Digit Profits by 2030 Boosted by Hydrogen Growth By Chris1 – Community Contributor Fair Value Estimated: €14.40 · 0.3% Overvalued Tesla's Nvidia Moment – The AI & Robotics Inflection Point By BlackGoat – Community Contributor Fair Value Estimated: $359.72 · 0.1% Overvalued View more featured narratives — 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
05-07-2025
- Business
- Yahoo
Calculating The Fair Value Of Tasmea Limited (ASX:TEA)
Using the 2 Stage Free Cash Flow to Equity, Tasmea fair value estimate is AU$3.55 With AU$3.51 share price, Tasmea appears to be trading close to its estimated fair value Analyst price target for TEA is AU$4.40, which is 24% above our fair value estimate How far off is Tasmea Limited (ASX:TEA) from its intrinsic value? Using the most recent financial data, we'll take a look at whether the stock is fairly priced by estimating the company's future cash flows and discounting them to their present value. One way to achieve this is by employing the Discounted Cash Flow (DCF) model. Models like these may appear beyond the comprehension of a lay person, but they're fairly easy to follow. We generally believe that a company's value is the present value of all of the cash it will generate in the future. However, a DCF is just one valuation metric among many, and it is not without flaws. 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. AI is about to change healthcare. These 20 stocks are working on everything from early diagnostics to drug discovery. The best part - they are all under $10bn in marketcap - there is still time to get in early. We're using the 2-stage growth model, which simply means we take in account two stages of company's growth. In the initial period the company may have a higher growth rate and the second stage is usually assumed to have a stable growth rate. To start off with, we need to estimate the next ten years of cash flows. Where possible we use analyst estimates, but when these aren't available we extrapolate the previous free cash flow (FCF) from the last estimate or reported value. We assume companies with shrinking free cash flow will slow their rate of shrinkage, and that companies with growing free cash flow will see their growth rate slow, over this period. We do this to reflect that growth tends to slow more in the early years than it does in later years. Generally we assume that a dollar today is more valuable than a dollar in the future, so we discount the value of these future cash flows to their estimated value in today's dollars: 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 Levered FCF (A$, Millions) AU$64.5m AU$73.6m AU$53.0m AU$50.1m AU$48.7m AU$48.1m AU$48.1m AU$48.6m AU$49.3m AU$50.3m Growth Rate Estimate Source Analyst x2 Analyst x2 Analyst x1 Est @ -5.43% Est @ -2.92% Est @ -1.16% Est @ 0.07% Est @ 0.94% Est @ 1.54% Est @ 1.96% Present Value (A$, Millions) Discounted @ 7.9% AU$59.8 AU$63.3 AU$42.2 AU$37.0 AU$33.3 AU$30.5 AU$28.3 AU$26.5 AU$24.9 AU$23.6 ("Est" = FCF growth rate estimated by Simply Wall St)Present Value of 10-year Cash Flow (PVCF) = AU$369m The second stage is also known as Terminal Value, this is the business's cash flow after the first stage. 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 (2.9%) 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 7.9%. Terminal Value (TV)= FCF2035 × (1 + g) ÷ (r – g) = AU$50m× (1 + 2.9%) ÷ (7.9%– 2.9%) = AU$1.1b Present Value of Terminal Value (PVTV)= TV / (1 + r)10= AU$1.1b÷ ( 1 + 7.9%)10= AU$493m 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$863m. In the final step we divide the equity value by the number of shares outstanding. Compared to the current share price of AU$3.5, the company appears about fair value at a 1.1% 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. 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 Tasmea 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 7.9%, which is based on a levered beta of 1.136. 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. Check out our latest analysis for Tasmea Strength Earnings growth over the past year exceeded the industry. Debt is well covered by earnings and cashflows. Weakness Dividend is low compared to the top 25% of dividend payers in the Construction market. Opportunity Annual earnings are forecast to grow faster than the Australian market. Current share price is below our estimate of fair value. Threat Dividends are not covered by cash flow. Revenue is forecast to grow slower than 20% per year. Whilst important, the DCF calculation ideally won't be the sole piece of analysis you scrutinize for a company. The DCF model is not a perfect stock valuation tool. 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 Tasmea, there are three relevant factors you should further examine: Risks: For instance, we've identified 2 warning signs for Tasmea that you should be aware of. Future Earnings: How does TEA'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. — Investing narratives with Fair Values Suncorp's Next Chapter: Insurance-Only and Ready to Grow By Robbo – Community Contributor Fair Value Estimated: A$22.83 · 0.1% Overvalued Thyssenkrupp Nucera Will Achieve Double-Digit Profits by 2030 Boosted by Hydrogen Growth By Chris1 – Community Contributor Fair Value Estimated: €14.40 · 0.3% Overvalued Tesla's Nvidia Moment – The AI & Robotics Inflection Point By BlackGoat – Community Contributor Fair Value Estimated: $359.72 · 0.1% Overvalued View more featured narratives — 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. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
15-04-2025
- Business
- Yahoo
3 Undiscovered Gems in Australia with Promising Potential
The Australian market has been experiencing a relatively stable period, with the ASX200 closing at 7,760 points and sectors such as Health Care showing positive momentum. In this environment of steady market activity and sector-specific movements, identifying stocks with unique growth potential can be particularly rewarding. Discovering these hidden gems requires looking beyond current volatility and focusing on companies that demonstrate resilience and innovation in their respective fields. Name Debt To Equity Revenue Growth Earnings Growth Health Rating Sugar Terminals NA 3.78% 4.30% ★★★★★★ Schaffer 25.47% 6.03% -5.20% ★★★★★★ Fiducian Group NA 9.97% 7.85% ★★★★★★ Hearts and Minds Investments NA 47.09% 49.82% ★★★★★★ Tribune Resources NA -10.33% -48.18% ★★★★★★ Djerriwarrh Investments 1.14% 8.17% 7.54% ★★★★★★ Red Hill Minerals NA 95.16% 40.06% ★★★★★★ Lycopodium 6.89% 16.56% 32.73% ★★★★★☆ Carlton Investments 0.02% 4.45% 3.97% ★★★★★☆ K&S 20.24% 1.58% 25.54% ★★★★☆☆ Click here to see the full list of 50 stocks from our ASX Undiscovered Gems With Strong Fundamentals screener. Let's explore several standout options from the results in the screener. Simply Wall St Value Rating: ★★★★☆☆ Overview: Aurelia Metals Limited is an Australian company focused on the exploration and production of mineral properties, with a market capitalization of A$406.22 million. Operations: Aurelia Metals generates revenue primarily from its Peak Mine, contributing A$245.13 million, followed by the Dargues Mine at A$73.90 million and Hera Mine at A$5.98 million. Aurelia Metals, a promising player in the mining sector, has shown significant improvements recently. The company reported a net income of A$17.95 million for the half-year ending December 2024, bouncing back from a loss of A$2.03 million the previous year. Sales increased to A$162.42 million from A$147.29 million, indicating robust operational performance despite lower gold and silver production compared to last year. Trading at 85% below its estimated fair value suggests potential upside for investors seeking undervalued opportunities. However, its interest coverage ratio of 2.6x indicates room for improvement in managing debt-related expenses efficiently. Take a closer look at Aurelia Metals' potential here in our health report. Understand Aurelia Metals' track record by examining our Past report. Simply Wall St Value Rating: ★★★★★☆ Overview: Tasmea Limited offers shutdown, maintenance, emergency breakdown, and capital upgrade services in Australia with a market capitalization of A$612.06 million. Operations: With a market capitalization of A$612.06 million, Tasmea Limited generates revenue primarily from providing shutdown, maintenance, emergency breakdown, and capital upgrade services in Australia. Tasmea's recent addition to the S&P/ASX All Ordinaries Index highlights its growing prominence. The company reported impressive half-year sales of A$246.65 million, up from A$193.32 million, with net income jumping to A$27.81 million from A$15.78 million a year earlier, showcasing solid growth momentum. Earnings per share rose to A$0.12 from A$0.08, reflecting improved profitability despite a high net debt to equity ratio of 49.7%. With earnings growth outpacing the construction industry at 75% and well-covered interest payments by EBIT (10x), Tasmea seems poised for continued expansion under fresh leadership and strategic focus on organic growth strategies. Get an in-depth perspective on Tasmea's performance by reading our health report here. Assess Tasmea's past performance with our detailed historical performance reports. Simply Wall St Value Rating: ★★★★★★ Overview: West African Resources Limited focuses on the mining, mineral processing, acquisition, exploration, and project development of gold projects in West Africa with a market capitalization of A$2.66 billion. Operations: West African Resources Limited generates its revenue primarily from mining operations, amounting to A$726.63 million. The company's financial structure includes a notable net profit margin trend, which can provide insights into its profitability. West African Resources is gearing up for a transformative phase with its Kiaka project, which is over 80% complete and set to start gold production in Q3 2025. This development could elevate annual output to about 420,000 ounces, enhancing revenue streams. The firm reported first-quarter gold production at 50,033 ounces and sales of 48,338 ounces at an average price of US$2,832 per ounce. With net income rising from A$146.87 million to A$223.84 million year-over-year and profit margins projected to grow from 30.7% to 35.3%, the company shows promising potential despite regulatory risks in Burkina Faso and market volatility concerns impacting future earnings projections between A$423.6 million and A$840 million by April 2028. West African Resources is set to boost gold output with its Kiaka project completion. Click here to explore the full narrative on the company's growth prospects. Click here to access our complete index of 50 ASX Undiscovered Gems With Strong Fundamentals. 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. Discover a world of investment opportunities with Simply Wall St's free app and access unparalleled stock analysis across all markets. Explore high-performing small cap companies that haven't yet garnered significant analyst attention. Fuel your portfolio with companies showing strong growth potential, backed by optimistic outlooks both from analysts and management. Find companies with promising cash flow potential yet trading below their fair value. 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:AMI ASX:TEA and ASX:WAF. Have feedback on this article? Concerned about the content? with us directly. Alternatively, email editorial-team@
