As of June 1, 2025, Hemisphere Media Group Inc has a Discounted Cash Flow (DCF) derived fair value of $5.57 per share. With the current market price at $7.15, this represents a potential upside of -22.1%.
| Key Metrics | Value |
|---|---|
| DCF Fair Value (5-year) | $1.98 |
| DCF Fair Value (10-year) | $5.57 |
| Potential Upside (5-year) | -72.4% |
| Potential Upside (10-year) | -22.1% |
| Discount Rate (WACC) | 4.8% - 11.8% |
Revenue is projected to grow from $196 million in 12-2021 to $430 million by 12-2031, representing a compound annual growth rate of approximately 8.2%.
| Fiscal Year | Revenue (USD millions) | Growth |
|---|---|---|
| 12-2021 | 196 | 29% |
| 12-2022 | 230 | 17% |
| 12-2023 | 255 | 11% |
| 12-2024 | 274 | 7% |
| 12-2025 | 292 | 7% |
| 12-2026 | 310 | 6% |
| 12-2027 | 331 | 7% |
| 12-2028 | 360 | 9% |
| 12-2029 | 385 | 7% |
| 12-2030 | 417 | 8% |
| 12-2031 | 430 | 3% |
Net profit margin is expected to improve from 6% in 12-2021 to 12% by 12-2031, driven by operational efficiency and economies of scale.
| Fiscal Year | Net Profit (USD millions) | Profit Margin |
|---|---|---|
| 12-2021 | 11 | 6% |
| 12-2022 | 16 | 7% |
| 12-2023 | 21 | 8% |
| 12-2024 | 25 | 9% |
| 12-2025 | 29 | 10% |
| 12-2026 | 34 | 11% |
| 12-2027 | 37 | 11% |
| 12-2028 | 41 | 11% |
| 12-2029 | 44 | 12% |
| 12-2030 | 49 | 12% |
| 12-2031 | 51 | 12% |
with a 5-year average of $5 million. Projected CapEx is expected to maintain at approximately 3% of revenue.
Depreciation is based on an average useful life of 5 years for capital assets.
| Fiscal Year | D&A (USD millions) |
|---|---|
| 12-2022 | 6 |
| 12-2023 | 6 |
| 12-2024 | 6 |
| 12-2025 | 8 |
| 12-2026 | 9 |
| 12-2027 | 10 |
Net working capital is expected to increase gradually, with projected changes affecting free cash flow.
| Components | Average Days |
|---|---|
| Days Receivables | 74 |
| Days Inventory | 0 |
| Days Payables | 35 |
| Fiscal Year | EBITDA | Tax | CapEx | Change in NWC | FCF |
|---|---|---|---|---|---|
| 6M/2022 | 11 | 3 | 4 | 9 | (5) |
| 2023 | 27 | 8 | 8 | 4 | 6 |
| 2024 | 33 | 9 | 9 | (1) | 15 |
| 2025 | 40 | 11 | 10 | 7 | 12 |
| 2026 | 47 | 13 | 10 | 3 | 21 |
| Valuation Method | Fair Price (USD) | Potential Upside |
|---|---|---|
| 5-Year DCF (Growth) | 1.98 | -72.4% |
| 10-Year DCF (Growth) | 5.57 | -22.1% |
| 5-Year DCF (EBITDA) | 0.92 | -87.2% |
| 10-Year DCF (EBITDA) | 3.45 | -51.8% |
Is Hemisphere Media Group Inc (HMTV) a buy or a sell? Hemisphere Media Group Inc is definitely a sell. Based on our DCF analysis, Hemisphere Media Group Inc (HMTV) appears to be overvalued with upside potential of -22.1%. 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:
Investors should consider reducing exposure at the current market price of $7.15.