What is FN.TO's DCF valuation?

First National Financial Corp (FN.TO) DCF Valuation Analysis

Executive Summary

As of April 4, 2026, First National Financial Corp has a Discounted Cash Flow (DCF) derived fair value of $0.00 per share. With the current market price at $47.98, this represents a potential upside of -1843.1%.

Key Metrics Value
DCF Fair Value (5-year) $0.00
DCF Fair Value (10-year) $0.00
Potential Upside (5-year) -1858.9%
Potential Upside (10-year) -1843.1%
Discount Rate (WACC) 3.3% - 17.0%

Financial Performance & Projections

Revenue Trends

Revenue is projected to grow from $2217 million in 12-2024 to $1294 million by 12-2034, representing a compound annual growth rate of approximately -5.2%.

Fiscal Year Revenue (USD millions) Growth
12-2024 2217 10%
12-2025 892 -60%
12-2026 996 12%
12-2027 1067 7%
12-2028 1089 2%
12-2029 1113 2%
12-2030 1135 2%
12-2031 1199 6%
12-2032 1242 4%
12-2033 1267 2%
12-2034 1294 2%

Profitability Projections

Net profit margin is expected to improve from 9% in 12-2024 to 23% by 12-2034, driven by operational efficiency and economies of scale.

Fiscal Year Net Profit (USD millions) Profit Margin
12-2024 203 9%
12-2025 106 12%
12-2026 144 14%
12-2027 180 17%
12-2028 209 19%
12-2029 238 21%
12-2030 248 22%
12-2031 266 22%
12-2032 281 23%
12-2033 292 23%
12-2034 303 23%

DCF Model Components

1. Capital Expenditures (CapEx)

with a 5-year average of $12 million. Projected CapEx is expected to maintain at approximately 1% 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)
12-2025 12
12-2026 7
12-2027 7
12-2028 7
12-2029 8
12-2030 8

3. Working Capital Requirements

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

Components Average Days
Days Receivables 39
Days Inventory 0
Days Payables 0

4. Free Cash Flow Projections

Fiscal Year EBITDA Tax CapEx Change in NWC FCF
6M/2025 78 19 3 (71) 127
2026 203 52 8 9 135
2027 252 65 8 9 170
2028 291 75 8 2 206
2029 332 86 9 2 235

DCF Valuation Parameters

Key Assumptions

  • Discount Rate (WACC): WACC / Discount Rate (selected: 3.3% - 17.0%)
  • Long-Term Growth Rate: Long-term Growth Rate (selected: 3.0% - 3.0%)
  • Terminal EV/EBITDA Multiple: 36.2x (based on peer average)

Valuation Summary

Valuation Method Fair Price (USD) Potential Upside
5-Year DCF (Growth) 0.00 -1858.9%
10-Year DCF (Growth) 0.00 -1843.1%
5-Year DCF (EBITDA) 0.00 -100.0%
10-Year DCF (EBITDA) 0.00 -100.0%

Enterprise Value Breakdown

  • 5-Year Model: $2,602M
  • 10-Year Model: $3,056M

Investment Conclusion

Is First National Financial Corp (FN.TO) a buy or a sell? First National Financial Corp is definitely a sell. Based on our DCF analysis, First National Financial Corp (FN.TO) appears to be overvalued with upside potential of -1843.1%. 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 9% to 23%)
  • Strong free cash flow generation

Investors should consider reducing exposure at the current market price of $47.98.