Latest news with #PhoenixSpreeDeutschland
Yahoo
26-06-2025
- Business
- Yahoo
Phoenix Spree Deutschland (LON:PSDL) shareholders have endured a 49% loss from investing in the stock three years ago
Many investors define successful investing as beating the market average over the long term. But in any portfolio, there are likely to be some stocks that fall short of that benchmark. Unfortunately, that's been the case for longer term Phoenix Spree Deutschland Limited (LON:PSDL) shareholders, since the share price is down 49% in the last three years, falling well short of the market return of around 25%. Since shareholders are down over the longer term, lets look at the underlying fundamentals over the that time and see if they've been consistent with returns. Trump has pledged to "unleash" American oil and gas and these 15 US stocks have developments that are poised to benefit. Given that Phoenix Spree Deutschland didn't make a profit in the last twelve months, we'll focus on revenue growth to form a quick view of its business development. Shareholders of unprofitable companies usually desire strong revenue growth. That's because fast revenue growth can be easily extrapolated to forecast profits, often of considerable size. Over three years, Phoenix Spree Deutschland grew revenue at 3.4% per year. That's not a very high growth rate considering it doesn't make profits. The stock dropped 14% during that time. If revenue growth accelerates, we might see the share price bounce. But ultimately the key will be whether the company can become profitability. You can see how earnings and revenue have changed over time in the image below (click on the chart to see the exact values). You can see how its balance sheet has strengthened (or weakened) over time in this free interactive graphic. Phoenix Spree Deutschland shareholders have received returns of 8.0% over twelve months, which isn't far from the general market return. To take a positive view, the gain is pleasing, and it sure beats annualized TSR loss of 7%, which was endured over half a decade. While 'turnarounds seldom turn' there are green shoots for Phoenix Spree Deutschland. I find it very interesting to look at share price over the long term as a proxy for business performance. But to truly gain insight, we need to consider other information, too. Take risks, for example - Phoenix Spree Deutschland has 1 warning sign we think you should be aware of. If you like to buy stocks alongside management, then you might just love this free list of companies. (Hint: many of them are unnoticed AND have attractive valuation). Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on British exchanges. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) 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.
Yahoo
30-05-2025
- Business
- Yahoo
Estimating The Intrinsic Value Of Phoenix Spree Deutschland Limited (LON:PSDL)
The projected fair value for Phoenix Spree Deutschland is UK£1.75 based on 2 Stage Free Cash Flow to Equity With UK£1.66 share price, Phoenix Spree Deutschland appears to be trading close to its estimated fair value Phoenix Spree Deutschland's peers are currently trading at a premium of 211% on average Today we will run through one way of estimating the intrinsic value of Phoenix Spree Deutschland Limited (LON:PSDL) by estimating the company's future cash flows and discounting them to their present value. The Discounted Cash Flow (DCF) model is the tool we will apply to do this. Before you think you won't be able to understand it, just read on! It's actually much less complex than you'd imagine. Remember though, that there are many ways to estimate a company's value, and a DCF is just one method. If you want to learn more about discounted cash flow, the rationale behind this calculation can be read in detail in the Simply Wall St analysis model. This technology could replace computers: discover the 20 stocks are working to make quantum computing a reality. 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. Seeing as no analyst estimates of free cash flow are available to us, we have extrapolate the previous free cash flow (FCF) from the company's last 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. A DCF is all about the idea that a dollar in the future is less valuable than a dollar today, so we discount the value of these future cash flows to their estimated value in today's dollars: 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 Levered FCF (€, Millions) €13.0m €15.4m €17.6m €19.5m €21.1m €22.5m €23.7m €24.8m €25.7m €26.7m Growth Rate Estimate Source Est @ 26.34% Est @ 19.20% Est @ 14.20% Est @ 10.70% Est @ 8.26% Est @ 6.54% Est @ 5.34% Est @ 4.50% Est @ 3.91% Est @ 3.50% Present Value (€, Millions) Discounted @ 13% €11.5 €12.2 €12.4 €12.2 €11.7 €11.1 €10.3 €9.6 €8.9 €8.2 ("Est" = FCF growth rate estimated by Simply Wall St)Present Value of 10-year Cash Flow (PVCF) = €108m 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 (2.5%) 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 13%. Terminal Value (TV)= FCF2034 × (1 + g) ÷ (r – g) = €27m× (1 + 2.5%) ÷ (13%– 2.5%) = €272m Present Value of Terminal Value (PVTV)= TV / (1 + r)10= €272m÷ ( 1 + 13%)10= €83m 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 €191m. The last step is to then divide the equity value by the number of shares outstanding. Compared to the current share price of UK£1.7, the company appears about fair value at a 5.6% discount to where the stock price trades currently. The assumptions in any calculation have a big impact on the valuation, so it is better to view this as a rough estimate, not precise down to the last cent. We would point out that the most important inputs to a discounted cash flow are the discount rate and of course the actual cash flows. You don't have to agree with these inputs, I recommend redoing the calculations yourself and playing with them. 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 Phoenix Spree Deutschland 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 13%, which is based on a levered beta of 1.956. 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. View our latest analysis for Phoenix Spree Deutschland Strength No major strengths identified for PSDL. Weakness Interest payments on debt are not well covered. Opportunity Expected to breakeven next year. Has sufficient cash runway for more than 3 years based on current free cash flows. Current share price is below our estimate of fair value. Threat Debt is not well covered by operating cash flow. 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. It's not possible to obtain a foolproof valuation with a DCF model. Rather it should be seen as a guide to "what assumptions need to be true for this stock to be under/overvalued?" For instance, if the terminal value growth rate is adjusted slightly, it can dramatically alter the overall result. For Phoenix Spree Deutschland, we've compiled three important items you should consider: Risks: For instance, we've identified 1 warning sign for Phoenix Spree Deutschland that you should be aware of. Future Earnings: How does PSDL'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 British 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) 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.
