As of June 21, 2025, Samuel Heath and Sons PLC has a Discounted Cash Flow (DCF) derived fair value of $409.08 per share. With the current market price at $310.00, this represents a potential upside of 32.0%.
| Key Metrics | Value |
|---|---|
| DCF Fair Value (5-year) | $395.44 |
| DCF Fair Value (10-year) | $409.08 |
| Potential Upside (5-year) | 27.6% |
| Potential Upside (10-year) | 32.0% |
| Discount Rate (WACC) | 6.3% - 8.1% |
Revenue is projected to grow from $15 million in 03-2024 to $21 million by 03-2034, representing a compound annual growth rate of approximately 3.4%.
| Fiscal Year | Revenue (USD millions) | Growth |
|---|---|---|
| 03-2024 | 15 | 4% |
| 03-2025 | 15 | -3% |
| 03-2026 | 15 | 2% |
| 03-2027 | 16 | 4% |
| 03-2028 | 16 | 2% |
| 03-2029 | 17 | 8% |
| 03-2030 | 18 | 3% |
| 03-2031 | 19 | 6% |
| 03-2032 | 19 | 4% |
| 03-2033 | 20 | 2% |
| 03-2034 | 21 | 5% |
Net profit margin is expected to improve from 5% in 03-2024 to 5% by 03-2034, driven by operational efficiency and economies of scale.
| Fiscal Year | Net Profit (USD millions) | Profit Margin |
|---|---|---|
| 03-2024 | 1 | 5% |
| 03-2025 | 1 | 5% |
| 03-2026 | 1 | 5% |
| 03-2027 | 1 | 5% |
| 03-2028 | 1 | 5% |
| 03-2029 | 1 | 5% |
| 03-2030 | 1 | 5% |
| 03-2031 | 1 | 5% |
| 03-2032 | 1 | 5% |
| 03-2033 | 1 | 5% |
| 03-2034 | 1 | 5% |
with a 5-year average of $1 million. Projected CapEx is expected to maintain at approximately 6% of revenue.
Depreciation is based on an average useful life of 5 years for capital assets.
| Fiscal Year | D&A (USD millions) |
|---|---|
| 03-2025 | 1 |
| 03-2026 | 1 |
| 03-2027 | 1 |
| 03-2028 | 1 |
| 03-2029 | 1 |
| 03-2030 | 1 |
Net working capital is expected to increase gradually, with projected changes affecting free cash flow.
| Components | Average Days |
|---|---|
| Days Receivables | 35 |
| Days Inventory | 208 |
| Days Payables | 35 |
| Fiscal Year | EBITDA | Tax | CapEx | Change in NWC | FCF |
|---|---|---|---|---|---|
| 6M/2025 | 1 | 0 | 0 | (0) | 0 |
| 2026 | 2 | 0 | 1 | 0 | 1 |
| 2027 | 2 | 0 | 1 | 0 | 1 |
| 2028 | 2 | 0 | 1 | 0 | 1 |
| 2029 | 2 | 0 | 1 | 0 | 0 |
| Valuation Method | Fair Price (USD) | Potential Upside |
|---|---|---|
| 5-Year DCF (Growth) | 395.44 | 27.6% |
| 10-Year DCF (Growth) | 409.08 | 32.0% |
| 5-Year DCF (EBITDA) | 572.32 | 84.6% |
| 10-Year DCF (EBITDA) | 561.08 | 81.0% |
Is Samuel Heath and Sons PLC (HSM.L) a buy or a sell? Samuel Heath and Sons PLC is definitely a buy. Based on our DCF analysis, Samuel Heath and Sons PLC (HSM.L) appears to be significantly undervalued with upside potential of 32.0%. 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 $310.00.