As of June 21, 2025, Fronsac REIT has a Discounted Cash Flow (DCF) derived fair value of $10.78 per share. With the current market price at $7.98, this represents a potential upside of 35.0%.
| Key Metrics | Value |
|---|---|
| DCF Fair Value (5-year) | $6.98 |
| DCF Fair Value (10-year) | $10.78 |
| Potential Upside (5-year) | -12.6% |
| Potential Upside (10-year) | 35.0% |
| Discount Rate (WACC) | 5.1% - 6.4% |
Revenue is projected to grow from $16 million in 12-2020 to $31 million by 12-2030, representing a compound annual growth rate of approximately 6.8%.
| Fiscal Year | Revenue (USD millions) | Growth |
|---|---|---|
| 12-2020 | 16 | 68% |
| 12-2021 | 16 | 5% |
| 12-2022 | 17 | 8% |
| 12-2023 | 19 | 8% |
| 12-2024 | 21 | 10% |
| 12-2025 | 23 | 11% |
| 12-2026 | 25 | 9% |
| 12-2027 | 26 | 5% |
| 12-2028 | 28 | 5% |
| 12-2029 | 29 | 5% |
| 12-2030 | 31 | 6% |
Net profit margin is expected to improve from 62% in 12-2020 to 45% by 12-2030, driven by operational efficiency and economies of scale.
| Fiscal Year | Net Profit (USD millions) | Profit Margin |
|---|---|---|
| 12-2020 | 10 | 62% |
| 12-2021 | 7 | 45% |
| 12-2022 | 8 | 45% |
| 12-2023 | 9 | 45% |
| 12-2024 | 9 | 45% |
| 12-2025 | 10 | 45% |
| 12-2026 | 11 | 45% |
| 12-2027 | 12 | 45% |
| 12-2028 | 13 | 45% |
| 12-2029 | 13 | 45% |
| 12-2030 | 14 | 45% |
with a 5-year average of $0 million. Projected CapEx is expected to maintain at approximately 0% of revenue.
Depreciation is based on an average useful life of 5 years for capital assets.
| Fiscal Year | D&A (USD millions) |
|---|---|
| 12-2021 | 0 |
| 12-2022 | 0 |
| 12-2023 | 0 |
| 12-2024 | 0 |
| 12-2025 | 0 |
| 12-2026 | 0 |
Net working capital is expected to increase gradually, with projected changes affecting free cash flow.
| Components | Average Days |
|---|---|
| Days Receivables | 0 |
| Days Inventory | 0 |
| Days Payables | 126 |
| Fiscal Year | EBITDA | Tax | CapEx | Change in NWC | FCF |
|---|---|---|---|---|---|
| 2021 | 13 | 3 | 0 | (0) | 10 |
| 2022 | 13 | 3 | 0 | (0) | 11 |
| 2023 | 15 | 3 | 0 | (0) | 11 |
| 2024 | 16 | 3 | 0 | (0) | 13 |
| 2025 | 18 | 4 | 0 | (0) | 14 |
| Valuation Method | Fair Price (USD) | Potential Upside |
|---|---|---|
| 5-Year DCF (Growth) | 6.98 | -12.6% |
| 10-Year DCF (Growth) | 10.78 | 35.0% |
| 5-Year DCF (EBITDA) | 6.65 | -16.7% |
| 10-Year DCF (EBITDA) | 10.47 | 31.2% |
Is Fronsac REIT (FRO.UN.V) a buy or a sell? Fronsac REIT is definitely a buy. Based on our DCF analysis, Fronsac REIT (FRO.UN.V) appears to be significantly undervalued with upside potential of 35.0%. 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 strong buy at the current market price of $7.98.