Are Investors Undervaluing Grab Holdings Limited (NASDAQ:GRAB) By 30%?
Are Investors Undervaluing Grab Holdings Limited (NASDAQ:GRAB) By 30%?
Key Insights
- The projected fair value for Grab Holdings is US$4.68 based on 2 Stage Free Cash Flow to Equity
- Current share price of US$3.29 suggests Grab Holdings is potentially 30% undervalued
- Analyst price target for GRAB is US$4.65 which is similar to our fair value estimate
Today we will run through one way of estimating the intrinsic value of Grab Holdings Limited (NASDAQ:GRAB) by taking the expected future cash flows and discounting them to today's value. One way to achieve this is by employing the Discounted Cash Flow (DCF) model. Believe it or not, it's not too difficult to follow, as you'll see from our example!
Companies can be valued in a lot of ways, so we would point out that a DCF is not perfect for every situation. Anyone interested in learning a bit more about intrinsic value should have a read of the Simply Wall St analysis model.
The Model
We are going to use a two-stage DCF model, which, as the name states, takes into account two stages of growth. The first stage is generally a higher growth period which levels off heading towards the terminal value, captured in the second 'steady growth' period. To begin with, we have to get estimates of the next ten years of cash flows. Where possible we use analyst estimates, but when these aren't available we extrapolate the previous free cash flow (FCF) from the last estimate or reported value. We assume companies with shrinking free cash flow will slow their rate of shrinkage, and that companies with growing free cash flow will see their growth rate slow, over this period. We do this to reflect that growth tends to slow more in the early years than it does in later years.
Generally we assume that a dollar today is more valuable than a dollar in the future, and so the sum of these future cash flows is then discounted to today's value:
10-year free cash flow (FCF) forecast
2024 | 2025 | 2026 | 2027 | 2028 | 2029 | 2030 | 2031 | 2032 | 2033 | |
Levered FCF ($, Millions) | US$110.4m | US$433.0m | US$593.0m | US$716.3m | US$825.4m | US$919.2m | US$998.5m | US$1.07b | US$1.12b | US$1.17b |
Growth Rate Estimate Source | Analyst x7 | Analyst x7 | Analyst x5 | Est @ 20.79% | Est @ 15.24% | Est @ 11.35% | Est @ 8.64% | Est @ 6.73% | Est @ 5.40% | Est @ 4.47% |
Present Value ($, Millions) Discounted @ 6.9% | US$103 | US$379 | US$485 | US$548 | US$590 | US$615 | US$625 | US$623 | US$614 | US$600 |
("Est" = FCF growth rate estimated by Simply Wall St)
Present Value of 10-year Cash Flow (PVCF) = US$5.2b
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. 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 (2.3%) 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 6.9%.
Terminal Value (TV)= FCF2033 × (1 + g) ÷ (r – g) = US$1.2b× (1 + 2.3%) ÷ (6.9%– 2.3%) = US$26b
Present Value of Terminal Value (PVTV)= TV / (1 + r)10= US$26b÷ ( 1 + 6.9%)10= US$13b
The total value is the sum of cash flows for the next ten years plus the discounted terminal value, which results in the Total Equity Value, which in this case is US$18b. The last step is to then divide the equity value by the number of shares outstanding. Compared to the current share price of US$3.3, the company appears a touch undervalued at a 30% 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 Assumptions
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 Grab Holdings 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 6.9%, which is based on a levered beta of 1.010. 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.
SWOT Analysis for Grab Holdings
- Cash in surplus of total debt.
- Balance sheet summary for GRAB.
- Shareholders have been diluted in the past year.
- Forecast to reduce losses next year.
- Has sufficient cash runway for more than 3 years based on current free cash flows.
- Trading below our estimate of fair value by more than 20%.
- Debt is not well covered by operating cash flow.
- Is GRAB well equipped to handle threats?
Looking Ahead:
Valuation is only one side of the coin in terms of building your investment thesis, and it shouldn't be the only metric you look at when researching a company. The DCF model is not a perfect stock valuation tool. Rather it should be seen as a guide to "what assumptions need to be true for this stock to be under/overvalued?" If a company grows at a different rate, or if its cost of equity or risk free rate changes sharply, the output can look very different. Can we work out why the company is trading at a discount to intrinsic value? For Grab Holdings, we've compiled three relevant elements you should explore:
- Risks: Take risks, for example - Grab Holdings has 1 warning sign we think you should be aware of.
- Future Earnings: How does GRAB'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. Simply Wall St updates its DCF calculation for every American stock every day, so if you want to find the intrinsic value of any other stock just search here.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
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.
關鍵見解
- 根據兩階段股權自由現金流,Grab Holdings的預計公允價值爲4.68美元
- 目前3.29美元的股價表明Grab Holdings可能被低估了30%
- 分析師對GRAB的目標股價爲4.65美元,與我們的公允價值估計相似
今天,我們將介紹一種估算Grab Holdings Limited(納斯達克股票代碼:GRAB)內在價值的方法,即採用預期的未來現金流並將其折扣爲今天的價值。實現這一目標的一種方法是使用折扣現金流(DCF)模型。信不信由你,這並不難理解,正如你將從我們的例子中看到的那樣!
公司可以在很多方面得到估值,因此我們要指出,DCF並不適合所有情況。任何有興趣進一步了解內在價值的人都應該讀一讀 Simply Wall St 分析模型。
該模型
我們將使用兩階段的DCF模型,顧名思義,該模型考慮了兩個增長階段。第一階段通常是較高的增長期,在第二個 “穩步增長” 時期逐漸趨於平穩,最終值是第二個 “穩定增長” 時期。首先,我們必須估算出未來十年的現金流。在可能的情況下,我們會使用分析師的估計值,但是當這些估計值不可用時,我們會從最新的估計值或報告的價值中推斷出之前的自由現金流(FCF)。我們假設自由現金流萎縮的公司將減緩其萎縮速度,而自由現金流不斷增長的公司在此期間的增長率將放緩。我們這樣做是爲了反映早期增長的放緩幅度往往比後來的幾年更大。
通常,我們假設今天的一美元比未來一美元更有價值,因此這些未來現金流的總和將折現爲今天的價值:
10 年自由現金流 (FCF) 預測
2024 | 2025 | 2026 | 2027 | 2028 | 2029 | 2030 | 2031 | 2032 | 2033 | |
Levered FCF(美元,百萬) | 110.4 億美元 | 433.0 億美元 | 593.0 億美元 | 716.3 億美元 | 825.4 億美元 | 919.2 億美元 | 998.5 億美元 | 10.7 億美元 | 11.2 億美元 | 11.7 億美元 |
增長率估算來源 | 分析師 x7 | 分析師 x7 | 分析師 x5 | 估計 @ 20.79% | 美國東部時間 @ 15.24% | Est @ 11.35% | 美國東部標準時間 @ 8.64% | 美國東部標準時間 @ 6.73% | 美國東部時間 @ 5.40% | Est @ 4.47% |
現值(美元,百萬)折扣 @ 6.9% | 103 美元 | 379 美元 | 485 美元 | 548 美元 | 590 美元 | 615 美元 | 625 美元 | 623 美元 | 614 美元 | 600 美元 |
(“Est” = Simply Wall St估計的FCF增長率)
10 年期現金流 (PVCF) 的現值 = 52 億美元
在計算了最初10年期內未來現金流的現值之後,我們需要計算終值,該終值涵蓋了第一階段以後的所有未來現金流。出於多種原因,使用的增長率非常保守,不能超過一個國家的GDP增長率。在這種情況下,我們使用10年期國債收益率的5年平均值(2.3%)來估計未來的增長。與10年 “增長” 期一樣,我們將未來的現金流折現爲今天的價值,使用6.9%的股本成本。
終端價值 (TV) = FCF2033 × (1 + g) ÷ (r — g) = 12億美元× (1 + 2.3%) ÷ (6.9% — 2.3%) = 260億美元
終端價值的現值 (PVTV) = 電視/ (1 + r)10= 260億美元÷ (1 + 6.9%)10= 130 億美元
總價值是未來十年的現金流總額加上貼現的終端價值,由此得出總權益價值,在本例中爲180億美元。最後一步是將股票價值除以已發行股票的數量。與目前的3.3美元股價相比,該公司的估值似乎略有低估,比目前的股價折扣了30%。但是,估值是不精確的工具,就像望遠鏡一樣——移動幾度,最終進入另一個星系。請記住這一點。
假設
上面的計算在很大程度上取決於兩個假設。第一個是貼現率,另一個是現金流。如果你不同意這些結果,那就自己計算一下,試一試假設。DCF也沒有考慮一個行業可能的週期性,也沒有考慮公司未來的資本需求,因此它沒有全面反映公司的潛在表現。鑑於我們將Grab Holdings視爲潛在股東,因此使用權益成本作爲貼現率,而不是構成債務的資本成本(或加權平均資本成本,WACC)。在此計算中,我們使用了6.9%,這是基於1.010的槓桿測試版。Beta是衡量股票與整個市場相比波動性的指標。我們的測試版來自全球可比公司的行業平均貝塔值,設定在0.8到2.0之間,這是一個穩定的業務的合理範圍。
Grab 控股的 SWOT 分析
- 現金盈餘佔債務總額。
- GRAB 的資產負債表摘要。
- 在過去的一年中,股東被稀釋了。
- 預計明年將減少損失。
- 根據當前的自由現金流,有足夠的現金流超過3年。
- 交易價格比我們估計的公允價值低20%以上。
- 運營現金流無法很好地覆蓋債務。
- GRAB 有足夠的能力應對威脅嗎?
展望未來:
就建立投資論點而言,估值只是硬幣的一面,它不應該是你在研究公司時唯一考慮的指標。DCF模型不是完美的股票估值工具。相反,它應該被視爲 “需要哪些假設才能低估/高估這隻股票的價值?” 的指南如果一家公司以不同的速度增長,或者其股本成本或無風險利率急劇變化,則產出可能會大不相同。我們能否弄清楚爲什麼公司的交易價格低於內在價值?對於Grab Holdings,我們整理了三個值得探索的相關元素:
- 風險:例如,冒險——Grab Holdings有1個我們認爲你應該注意的警告信號。
- 未來收益:與同行和整個市場相比,GRAB的增長率如何?通過與我們的免費分析師增長預期圖表互動,深入了解未來幾年的分析師共識數字。
- 其他穩健的業務:低債務、高股本回報率和良好的過去表現是強大業務的基礎。爲什麼不瀏覽我們具有堅實業務基礎的股票互動清單,看看是否還有其他你可能沒有考慮過的公司!
PS。Simply Wall St每天都會更新每隻美國股票的差價合約計算結果,因此,如果您想找到任何其他股票的內在價值,請在此處搜索。
對這篇文章有反饋嗎?對內容感到擔憂?直接聯繫我們。 或者,給編輯團隊 (at) simplywallst.com 發送電子郵件。
Simply Wall St的這篇文章本質上是籠統的。我們僅使用公正的方法根據歷史數據和分析師的預測提供評論,我們的文章無意作爲財務建議。它不構成買入或賣出任何股票的建議,也沒有考慮到您的目標或財務狀況。我們的目標是爲您提供由基本數據驅動的長期重點分析。請注意,我們的分析可能不考慮最新的價格敏感型公司公告或定性材料。簡而言之,華爾街沒有持有任何上述股票的頭寸。
譯文內容由第三人軟體翻譯。
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