VHI.TO
VITALHUB CORPClosedVHI.TO discounted cash flow valuation
VHI.TO Fair Value
Reverse DCF: today's price implies 2.5% a year of FCF growth for years 1–5, against 9.9% in this model.
Model: 9.9% from analyst next-year revenue growth. Fades linearly to terminal growth by year 10.
Model: 9.33% (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 204.05M |
|---|---|
| PV of terminal value (59% of EV) | CAD 292.74M |
| Enterprise value | CAD 496.79M |
| + Cash & investments | CAD 136.51M |
| − Total debt | −CAD 2.86M |
| Equity value | CAD 630.43M |
| ÷ Shares outstanding | 63.34M |
| Value per share | CAD 9.95 |
| Market cap | CAD 461.74M |
Discount Rate Build-up
| Risk-free rate (10-yr Treasury) | 5.19% |
|---|---|
| Beta (adjusted toward 1) | 0.93 |
| Equity risk premium | 4.50% |
| Cost of equity (CAPM) | 9.36% |
| Pre-tax cost of debt | 5.19% |
| Tax rate | 15.0% |
| Debt / (equity + debt) | 0.6% |
| WACC | 9.33% |
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% |
|---|---|---|---|---|---|
| 7.33% | 12.00 | 12.81 | 13.80 | 15.05 | 16.68 |
| 8.33% | 10.35 | 10.88 | 11.51 | 12.28 | 13.21 |
| 9.33% | 9.15 | 9.52 | 9.95 | 10.46 | 11.05 |
| 10.33% | 8.25 | 8.52 | 8.82 | 9.17 | 9.58 |
| 11.33% | 7.54 | 7.74 | 7.97 | 8.22 | 8.51 |
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 20.71M | — | — |
| Year 1 | 9.9% | CAD 22.76M | 0.915 | CAD 20.82M |
| Year 2 | 9.9% | CAD 25.02M | 0.837 | CAD 20.93M |
| Year 3 | 9.9% | CAD 27.49M | 0.765 | CAD 21.04M |
| Year 4 | 9.9% | CAD 30.21M | 0.700 | CAD 21.15M |
| Year 5 | 9.9% | CAD 33.20M | 0.640 | CAD 21.26M |
| Year 6 | 8.5% | CAD 36.03M | 0.586 | CAD 21.10M |
| Year 7 | 7.1% | CAD 38.61M | 0.536 | CAD 20.68M |
| Year 8 | 5.8% | CAD 40.83M | 0.490 | CAD 20.00M |
| Year 9 | 4.4% | CAD 42.62M | 0.448 | CAD 19.10M |
| Year 10 | 3.0% | CAD 43.90M | 0.410 | CAD 17.99M |
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.