EXE.TO
EXTENDICARE INCClosedEXE.TO discounted cash flow valuation
EXE.TO Fair Value
Reverse DCF: today's price implies 12.6% a year of FCF growth for years 1–5, against 10.1% in this model.
Model: 10.1% from analyst next-year revenue growth. Fades linearly to terminal growth by year 10.
Model: 8.68% (CAPM, see the build-up).
Long-run growth after year 10; keep it at or below nominal GDP.
Value Bridge
| PV of free cash flow, years 1–10 | CAD 1.01B |
|---|---|
| PV of terminal value (62% of EV) | CAD 1.66B |
| Enterprise value | CAD 2.67B |
| + Cash & investments | CAD 93.47M |
| − Total debt | −CAD 645.75M |
| Equity value | CAD 2.12B |
| ÷ Shares outstanding | 95.05M |
| Value per share | CAD 22.31 |
| Market cap | CAD 2.53B |
Discount Rate Build-up
| Risk-free rate (10-yr Treasury) | 5.19% |
|---|---|
| Beta (adjusted toward 1) | 1.05 |
| Equity risk premium | 4.50% |
| Cost of equity (CAPM) | 9.91% |
| Pre-tax cost of debt | 5.19% |
| Tax rate | 25.7% |
| Debt / (equity + debt) | 20.3% |
| WACC | 8.68% |
Beta is Yahoo's, held between 0.5 and 2.5, then moved a third of the way toward 1. Cost of debt is interest expense ÷ total debt, held between the risk-free rate and 12%. WACC is at least the risk-free rate plus 2%.
Free Cash Flow: History and Projection
Sensitivity: Value per Share
| WACC ↓ / g → | 2.00% | 2.50% | 3.00% | 3.50% | 4.00% |
|---|---|---|---|---|---|
| 6.68% | 30.50 | 34.02 | 38.49 | 44.38 | 52.46 |
| 7.68% | 23.77 | 25.98 | 28.67 | 32.00 | 36.23 |
| 8.68% | 19.06 | 20.56 | 22.31 | 24.41 | 26.95 |
| 9.68% | 15.60 | 16.66 | 17.88 | 19.29 | 20.95 |
| 10.68% | 12.94 | 13.72 | 14.60 | 15.61 | 16.76 |
Green is above today's price, red below (full colour at ±30%). The outlined centre cell is the current inputs.
Projected Cash Flows
| Year | Growth | Free cash flow | Discount factor | Present value |
|---|---|---|---|---|
| Base (TTM) | — | CAD 98.28M | — | — |
| Year 1 | 10.1% | CAD 108.21M | 0.920 | CAD 99.56M |
| Year 2 | 10.1% | CAD 119.14M | 0.847 | CAD 100.87M |
| Year 3 | 10.1% | CAD 131.17M | 0.779 | CAD 102.18M |
| Year 4 | 10.1% | CAD 144.42M | 0.717 | CAD 103.52M |
| Year 5 | 10.1% | CAD 159.00M | 0.660 | CAD 104.87M |
| Year 6 | 8.7% | CAD 172.80M | 0.607 | CAD 104.87M |
| Year 7 | 7.3% | CAD 185.35M | 0.558 | CAD 103.50M |
| Year 8 | 5.8% | CAD 196.17M | 0.514 | CAD 100.80M |
| Year 9 | 4.4% | CAD 204.84M | 0.473 | CAD 96.84M |
| Year 10 | 3.0% | CAD 210.99M | 0.435 | CAD 91.78M |
Method
Two-stage free-cash-flow model, the same as the bot's lgf dcf: five years at the chosen growth rate, a straight-line fade to terminal growth by year ten, then a Gordon-growth terminal value. Everything is discounted at WACC.
Base cash flow is the trailing four quarters of operating cash flow minus capital expenditure (the latest fiscal year when quarters are missing). Default growth uses analyst long-term growth when Yahoo publishes it, else next year's revenue growth (steadier than one year's EPS), else next year's EPS growth, else revenue CAGR, held between −2% and 25%. Terminal growth defaults to 3%.
A DCF is only as good as its inputs. The terminal value is usually most of the answer, so read the sensitivity grid before the headline number. This is a model, not investment advice.