MCY.NZ
Mercury NZ Limited Ordinary ShaClosedMCY.NZ discounted cash flow valuation
MCY.NZ Fair Value
Reverse DCF: today's price implies 44.5% a year of FCF growth for years 1–5, against 5.2% in this model.
Model: 5.2% from analyst next-year EPS & revenue growth. Fades linearly to terminal growth by year 10.
Model: 6.90% (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 | NZD 477.70M |
|---|---|
| PV of terminal value (67% of EV) | NZD 973.13M |
| Enterprise value | NZD 1.45B |
| + Cash & investments | NZD 97.00M |
| − Total debt | −NZD 2.51B |
| Equity value | −NZD 964.17M |
| ÷ Shares outstanding | 1.44B |
| Value per share | NZD -0.6710 |
| Market cap | NZD 9.61B |
Discount Rate Build-up
| Risk-free rate (10-yr Treasury) | 5.22% |
|---|---|
| Beta (clamped 0.5–2.5) | 0.50 |
| Equity risk premium | 5.00% |
| Cost of equity (CAPM) | 7.72% |
| Pre-tax cost of debt | 5.22% |
| Tax rate | 28.0% |
| Debt / (equity + debt) | 20.7% |
| WACC | 6.90% |
Cost of debt is interest expense ÷ total debt, held between the risk-free rate and 12%.
Free Cash Flow: History and Projection
Sensitivity: Value per Share
| WACC ↓ / g → | 1.50% | 2.00% | 2.50% | 3.00% | 3.50% |
|---|---|---|---|---|---|
| 4.90% | -0.2969 | -0.0966 | 0.1870 | 0.6200 | 1.36 |
| 5.90% | -0.6178 | -0.5090 | -0.3683 | -0.1791 | 0.0889 |
| 6.90% | -0.8195 | -0.7528 | -0.6710 | -0.5682 | -0.4352 |
| 7.90% | -0.9580 | -0.9138 | -0.8614 | -0.7983 | -0.7209 |
| 8.90% | -1.06 | -1.03 | -0.9921 | -0.9503 | -0.9007 |
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 (FY2026) | — | NZD 53.00M | — | — |
| Year 1 | 5.2% | NZD 55.76M | 0.935 | NZD 52.16M |
| Year 2 | 5.2% | NZD 58.66M | 0.875 | NZD 51.33M |
| Year 3 | 5.2% | NZD 61.71M | 0.819 | NZD 50.51M |
| Year 4 | 5.2% | NZD 64.91M | 0.766 | NZD 49.71M |
| Year 5 | 5.2% | NZD 68.29M | 0.716 | NZD 48.92M |
| Year 6 | 4.7% | NZD 71.47M | 0.670 | NZD 47.89M |
| Year 7 | 4.1% | NZD 74.42M | 0.627 | NZD 46.65M |
| Year 8 | 3.6% | NZD 77.08M | 0.586 | NZD 45.20M |
| Year 9 | 3.0% | NZD 79.42M | 0.549 | NZD 43.57M |
| Year 10 | 2.5% | NZD 81.41M | 0.513 | NZD 41.77M |
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 the average of next year's EPS and revenue growth, else revenue CAGR, held between −5% and 25%.
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.