As of June 21, 2025, HomeServe PLC has a Discounted Cash Flow (DCF) derived fair value of $912.61 per share. With the current market price at $0.00, this represents a potential upside of 2.3%.
| Key Metrics | Value |
|---|---|
| DCF Fair Value (5-year) | $912.61 |
| DCF Fair Value (10-year) | $0.00 |
| Potential Upside (5-year) | -23.8% |
| Potential Upside (10-year) | 2.3% |
| Discount Rate (WACC) | 6.3% - 8.1% |
Revenue is projected to grow from $1429 million in 03-2022 to $2903 million by 03-2032, representing a compound annual growth rate of approximately 7.3%.
| Fiscal Year | Revenue (USD millions) | Growth |
|---|---|---|
| 03-2022 | 1429 | 10% |
| 03-2023 | 1480 | 4% |
| 03-2024 | 1579 | 7% |
| 03-2025 | 1690 | 7% |
| 03-2026 | 1852 | 10% |
| 03-2027 | 2004 | 8% |
| 03-2028 | 2169 | 8% |
| 03-2029 | 2304 | 6% |
| 03-2030 | 2492 | 8% |
| 03-2031 | 2673 | 7% |
| 03-2032 | 2903 | 9% |
Net profit margin is expected to improve from 9% in 03-2022 to 10% by 03-2032, driven by operational efficiency and economies of scale.
| Fiscal Year | Net Profit (USD millions) | Profit Margin |
|---|---|---|
| 03-2022 | 133 | 9% |
| 03-2023 | 141 | 10% |
| 03-2024 | 152 | 10% |
| 03-2025 | 164 | 10% |
| 03-2026 | 181 | 10% |
| 03-2027 | 198 | 10% |
| 03-2028 | 215 | 10% |
| 03-2029 | 228 | 10% |
| 03-2030 | 247 | 10% |
| 03-2031 | 266 | 10% |
| 03-2032 | 289 | 10% |
with a 5-year average of $91 million. Projected CapEx is expected to maintain at approximately 8% of revenue.
Depreciation is based on an average useful life of 5 years for capital assets.
| Fiscal Year | D&A (USD millions) |
|---|---|
| 03-2023 | 91 |
| 03-2024 | 96 |
| 03-2025 | 108 |
| 03-2026 | 125 |
| 03-2027 | 145 |
| 03-2028 | 157 |
Net working capital is expected to increase gradually, with projected changes affecting free cash flow.
| Components | Average Days |
|---|---|
| Days Receivables | 130 |
| Days Inventory | 162 |
| Days Payables | 0 |
| Fiscal Year | EBITDA | Tax | CapEx | Change in NWC | FCF |
|---|---|---|---|---|---|
| 6M/2023 | 152 | 21 | 62 | 22 | 46 |
| 2024 | 326 | 46 | 133 | 17 | 130 |
| 2025 | 357 | 50 | 143 | 41 | 124 |
| 2026 | 400 | 55 | 156 | 62 | 126 |
| 2027 | 445 | 60 | 169 | 48 | 167 |
| Valuation Method | Fair Price (USD) | Potential Upside |
|---|---|---|
| 5-Year DCF (Growth) | 912.61 | -23.8% |
| 10-Year DCF (Growth) | 0.00 | 2.3% |
| 5-Year DCF (EBITDA) | 458.44 | +Inf% |
| 10-Year DCF (EBITDA) | 677.11 | +Inf% |
Is HomeServe PLC (HSV.L) a buy or a sell? HomeServe PLC is definitely a buy. Based on our DCF analysis, HomeServe PLC (HSV.L) appears to be significantly undervalued with upside potential of 2.3%. 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 $0.00.