Running The Numbers - Methven ($MVN.NZ)
Methven ($MVN.NZ) is a New Zealand company that designs and supplies taps and shower-ware. $MVN.NZ has risen over 30% since hitting a low of NZ$0.97 in March. $MVN.NZ is currently trading at NZ$1.30. How is this in relation to the intrinsic value of the company’s shares?
Valuecruncher Interactive Analyst Report for $MVN.NZ
Valuecruncher produces a valuation of NZ$1.67 for $MVN.NZ. This is a current valuation (an estimate of intrinsic value using a discounted cash flow model) not a target price. This valuation is 28.5% above the current share price of NZ$1.30.
Assumptions
- Revenue: Reuters aggregates four analysts covering $MVN.NZ and the mean estimates of 2010 and 2011 revenues are NZ$141.6 million and NZ$146.1 million respectively. For our analysis we have used NZ$145.0 million in 2010, NZ$150.0 million in 2011 and NZ$155.0 million in 2012.
- Profitability: We have used a flat EBITDA margin of 14.0% to 2012. Reuters don’t list an EBITD margin for $MVN.NZ.
- Capital Expenditure: We have assumed capital expenditures of NZ$3.0 million per annum moving forward.
- Discount Rate: 11.0%. The PwC New Zealand cost of capital report does not list $MVN.NZ but has the wider market at 8.3%. We believe a discount rate in the 10-12% range is appropriate. We have chosen the middle of this range.
- Terminal Growth Rate: 2.0%.
Our analysis incorporates the cash and debt on the $MVN.NZ balance sheet – Valuecruncher calculates a net debt number.
Play with our assumptions – what does your analysis say?
Disclosure: None