What is ATG.L's DCF valuation?

Auction Technology Group PLC (ATG.L) DCF Valuation Analysis

Executive Summary

As of December 15, 2025, Auction Technology Group PLC has a Discounted Cash Flow (DCF) derived fair value of $0.00 per share. With the current market price at $283.00, this represents a potential upside of -1191.9%.

Key Metrics Value
DCF Fair Value (5-year) $0.00
DCF Fair Value (10-year) $0.00
Potential Upside (5-year) -935.8%
Potential Upside (10-year) -1191.9%
Discount Rate (WACC) 8.3% - 11.2%

Financial Performance & Projections

Revenue Trends

Revenue is projected to grow from $190 million in 09-2025 to $689 million by 09-2035, representing a compound annual growth rate of approximately 13.7%.

Fiscal Year Revenue (USD millions) Growth
09-2025 190 9%
09-2026 249 31%
09-2027 264 6%
09-2028 300 14%
09-2029 355 18%
09-2030 397 12%
09-2031 454 14%
09-2032 519 14%
09-2033 581 12%
09-2034 633 9%
09-2035 689 9%

Profitability Projections

Net profit margin is expected to improve from -76% in 09-2025 to -54% by 09-2035, driven by operational efficiency and economies of scale.

Fiscal Year Net Profit (USD millions) Profit Margin
09-2025 (145) -76%
09-2026 (151) -61%
09-2027 (156) -59%
09-2028 (173) -58%
09-2029 (200) -56%
09-2030 (219) -55%
09-2031 (250) -55%
09-2032 (284) -55%
09-2033 (317) -54%
09-2034 (344) -54%
09-2035 (372) -54%

DCF Model Components

1. Capital Expenditures (CapEx)

with a 5-year average of $9 million. Projected CapEx is expected to maintain at approximately 6% of revenue.

2. Depreciation & Amortization

Depreciation is based on an average useful life of 5 years for capital assets.

Fiscal Year D&A (USD millions)
09-2026 11
09-2027 13
09-2028 14
09-2029 16
09-2030 19
09-2031 21

3. Working Capital Requirements

Net working capital is expected to increase gradually, with projected changes affecting free cash flow.

Components Average Days
Days Receivables 41
Days Inventory 0
Days Payables 38

4. Free Cash Flow Projections

Fiscal Year EBITDA Tax CapEx Change in NWC FCF
2026 (160) (35) 15 16 (156)
2027 (164) (37) 16 (4) (139)
2028 (182) (41) 18 1 (160)
2029 (210) (47) 21 7 (191)
2030 (228) (51) 24 1 (202)

DCF Valuation Parameters

Key Assumptions

  • Discount Rate (WACC): WACC / Discount Rate (selected: 8.3% - 11.2%)
  • Long-Term Growth Rate: Long-term Growth Rate (selected: 3.0% - 5.0%)
  • Terminal EV/EBITDA Multiple: 6.4x (based on peer average)

Valuation Summary

Valuation Method Fair Price (USD) Potential Upside
5-Year DCF (Growth) 0.00 -935.8%
10-Year DCF (Growth) 0.00 -1191.9%
5-Year DCF (EBITDA) 0.00 -100.0%
10-Year DCF (EBITDA) 0.00 -100.0%

Enterprise Value Breakdown

  • 5-Year Model: $(2,767)M
  • 10-Year Model: $(3,649)M

Investment Conclusion

Is Auction Technology Group PLC (ATG.L) a buy or a sell? Auction Technology Group PLC is definitely a sell. Based on our DCF analysis, Auction Technology Group PLC (ATG.L) appears to be overvalued with upside potential of -1191.9%. The company's strong projected growth in revenue and profitability, coupled with consistent capital expenditure, supports our positive outlook on its intrinsic value.

Key investment drivers include:

  • Expanding profit margins (from -76% to -54%)
  • Steady revenue growth (13.7% CAGR)
  • Strong free cash flow generation

Investors should consider reducing exposure at the current market price of $283.00.