As of May 27, 2025, Cincinnati Bell Inc has a Discounted Cash Flow (DCF) derived fair value of $11.27 per share. With the current market price at $15.48, this represents a potential upside of -27.2%.
| Key Metrics | Value |
|---|---|
| DCF Fair Value (5-year) | $3.42 |
| DCF Fair Value (10-year) | $11.27 |
| Potential Upside (5-year) | -77.9% |
| Potential Upside (10-year) | -27.2% |
| Discount Rate (WACC) | 5.4% - 9.2% |
Revenue is projected to grow from $1560 million in 12-2020 to $2048 million by 12-2030, representing a compound annual growth rate of approximately 2.8%.
| Fiscal Year | Revenue (USD millions) | Growth |
|---|---|---|
| 12-2020 | 1560 | 2% |
| 12-2021 | 1643 | 5% |
| 12-2022 | 1650 | 0% |
| 12-2023 | 1654 | 0% |
| 12-2024 | 1689 | 2% |
| 12-2025 | 1723 | 2% |
| 12-2026 | 1860 | 8% |
| 12-2027 | 1897 | 2% |
| 12-2028 | 1969 | 4% |
| 12-2029 | 2008 | 2% |
| 12-2030 | 2048 | 2% |
Net profit margin is expected to improve from -4% in 12-2020 to 0% by 12-2030, driven by operational efficiency and economies of scale.
| Fiscal Year | Net Profit (USD millions) | Profit Margin |
|---|---|---|
| 12-2020 | (56) | -4% |
| 12-2021 | (48) | -3% |
| 12-2022 | (37) | -2% |
| 12-2023 | (25) | -2% |
| 12-2024 | (14) | -1% |
| 12-2025 | (3) | 0% |
| 12-2026 | (3) | 0% |
| 12-2027 | (3) | 0% |
| 12-2028 | (4) | 0% |
| 12-2029 | (4) | 0% |
| 12-2030 | (4) | 0% |
with a 5-year average of $234 million. Projected CapEx is expected to maintain at approximately 19% of revenue.
Depreciation is based on an average useful life of 5 years for capital assets.
| Fiscal Year | D&A (USD millions) |
|---|---|
| 12-2021 | 238 |
| 12-2022 | 258 |
| 12-2023 | 275 |
| 12-2024 | 293 |
| 12-2025 | 312 |
| 12-2026 | 320 |
Net working capital is expected to increase gradually, with projected changes affecting free cash flow.
| Components | Average Days |
|---|---|
| Days Receivables | 83 |
| Days Inventory | 20 |
| Days Payables | 147 |
| Fiscal Year | EBITDA | Tax | CapEx | Change in NWC | FCF |
|---|---|---|---|---|---|
| 6M/2021 | 156 | (10) | 153 | (9) | 22 |
| 2022 | 347 | (16) | 308 | 12 | 44 |
| 2023 | 382 | (11) | 308 | 12 | 72 |
| 2024 | 418 | (6) | 315 | 2 | 108 |
| 2025 | 455 | (1) | 321 | 10 | 126 |
| Valuation Method | Fair Price (USD) | Potential Upside |
|---|---|---|
| 5-Year DCF (Growth) | 3.42 | -77.9% |
| 10-Year DCF (Growth) | 11.27 | -27.2% |
| 5-Year DCF (EBITDA) | 1.14 | -92.6% |
| 10-Year DCF (EBITDA) | 5.21 | -66.4% |
Is Cincinnati Bell Inc (CBB) a buy or a sell? Cincinnati Bell Inc is definitely a sell. Based on our DCF analysis, Cincinnati Bell Inc (CBB) appears to be overvalued with upside potential of -27.2%. 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:
Investors should consider reducing exposure at the current market price of $15.48.