As of May 22, 2025, Egdon Resources PLC has a Discounted Cash Flow (DCF) derived fair value of $4.77 per share. With the current market price at $4.40, this represents a potential upside of 8.4%.
| Key Metrics | Value |
|---|---|
| DCF Fair Value (5-year) | $2.25 |
| DCF Fair Value (10-year) | $4.77 |
| Potential Upside (5-year) | -48.9% |
| Potential Upside (10-year) | 8.4% |
| Discount Rate (WACC) | 6.9% - 9.1% |
Revenue is projected to grow from $7 million in 07-2022 to $11 million by 07-2032, representing a compound annual growth rate of approximately 4.6%.
| Fiscal Year | Revenue (USD millions) | Growth |
|---|---|---|
| 07-2022 | 7 | 532% |
| 07-2023 | 7 | 2% |
| 07-2024 | 6 | -8% |
| 07-2025 | 7 | 4% |
| 07-2026 | 7 | 9% |
| 07-2027 | 8 | 7% |
| 07-2028 | 8 | 7% |
| 07-2029 | 9 | 6% |
| 07-2030 | 10 | 6% |
| 07-2031 | 10 | 4% |
| 07-2032 | 11 | 9% |
Net profit margin is expected to improve from 48% in 07-2022 to 32% by 07-2032, driven by operational efficiency and economies of scale.
| Fiscal Year | Net Profit (USD millions) | Profit Margin |
|---|---|---|
| 07-2022 | 3 | 48% |
| 07-2023 | 2 | 29% |
| 07-2024 | 2 | 30% |
| 07-2025 | 2 | 30% |
| 07-2026 | 2 | 31% |
| 07-2027 | 3 | 32% |
| 07-2028 | 3 | 32% |
| 07-2029 | 3 | 32% |
| 07-2030 | 3 | 32% |
| 07-2031 | 3 | 32% |
| 07-2032 | 3 | 32% |
with a 5-year average of $1 million. Projected CapEx is expected to maintain at approximately 91% of revenue.
Depreciation is based on an average useful life of 5 years for capital assets.
| Fiscal Year | D&A (USD millions) |
|---|---|
| 07-2023 | 2 |
| 07-2024 | 3 |
| 07-2025 | 4 |
| 07-2026 | 5 |
| 07-2027 | 6 |
| 07-2028 | 7 |
Net working capital is expected to increase gradually, with projected changes affecting free cash flow.
| Components | Average Days |
|---|---|
| Days Receivables | 235 |
| Days Inventory | 1 |
| Days Payables | 234 |
| Fiscal Year | EBITDA | Tax | CapEx | Change in NWC | FCF |
|---|---|---|---|---|---|
| 6M/2023 | 2 | 0 | 3 | 1 | (2) |
| 2024 | 5 | 0 | 6 | (1) | (0) |
| 2025 | 7 | 0 | 6 | (0) | 0 |
| 2026 | 8 | 1 | 7 | 1 | 0 |
| 2027 | 10 | 1 | 7 | 0 | 2 |
| Valuation Method | Fair Price (USD) | Potential Upside |
|---|---|---|
| 5-Year DCF (Growth) | 2.25 | -48.9% |
| 10-Year DCF (Growth) | 4.77 | 8.4% |
| 5-Year DCF (EBITDA) | 3.36 | -23.6% |
| 10-Year DCF (EBITDA) | 4.42 | 0.6% |
Is Egdon Resources PLC (EDR.L) a buy or a sell? Egdon Resources PLC is definitely a buy. Based on our DCF analysis, Egdon Resources PLC (EDR.L) appears to be slightly undervalued with upside potential of 8.4%. 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 a hold with potential to accumulate at the current market price of $4.40.