As of May 27, 2025, IQE PLC has a Discounted Cash Flow (DCF) derived fair value of $0.00 per share. With the current market price at $10.94, this represents a potential upside of -155.1%.
| Key Metrics | Value |
|---|---|
| DCF Fair Value (5-year) | $0.00 |
| DCF Fair Value (10-year) | $0.00 |
| Potential Upside (5-year) | -314.3% |
| Potential Upside (10-year) | -155.1% |
| Discount Rate (WACC) | 5.5% - 7.8% |
Revenue is projected to grow from $115 million in 12-2023 to $151 million by 12-2033, representing a compound annual growth rate of approximately 2.8%.
| Fiscal Year | Revenue (USD millions) | Growth |
|---|---|---|
| 12-2023 | 115 | 31% |
| 12-2024 | 120 | 4% |
| 12-2025 | 123 | 3% |
| 12-2026 | 126 | 2% |
| 12-2027 | 128 | 2% |
| 12-2028 | 133 | 4% |
| 12-2029 | 136 | 2% |
| 12-2030 | 139 | 2% |
| 12-2031 | 144 | 3% |
| 12-2032 | 148 | 3% |
| 12-2033 | 151 | 2% |
Net profit margin is expected to improve from -25% in 12-2023 to 1% by 12-2033, driven by operational efficiency and economies of scale.
| Fiscal Year | Net Profit (USD millions) | Profit Margin |
|---|---|---|
| 12-2023 | (29) | -25% |
| 12-2024 | (18) | -15% |
| 12-2025 | (14) | -11% |
| 12-2026 | (10) | -8% |
| 12-2027 | (6) | -5% |
| 12-2028 | (3) | -2% |
| 12-2029 | (2) | -2% |
| 12-2030 | (1) | -1% |
| 12-2031 | (1) | 0% |
| 12-2032 | 0 | 0% |
| 12-2033 | 1 | 1% |
with a 5-year average of $21 million. Projected CapEx is expected to maintain at approximately 15% of revenue.
Depreciation is based on an average useful life of 5 years for capital assets.
| Fiscal Year | D&A (USD millions) |
|---|---|
| 12-2024 | 17 |
| 12-2025 | 18 |
| 12-2026 | 18 |
| 12-2027 | 18 |
| 12-2028 | 19 |
| 12-2029 | 19 |
Net working capital is expected to increase gradually, with projected changes affecting free cash flow.
| Components | Average Days |
|---|---|
| Days Receivables | 86 |
| Days Inventory | 84 |
| Days Payables | 50 |
| Fiscal Year | EBITDA | Tax | CapEx | Change in NWC | FCF |
|---|---|---|---|---|---|
| 6M/2024 | (2) | (3) | 9 | (1) | (7) |
| 2025 | 2 | (5) | 18 | 3 | (14) |
| 2026 | 8 | (4) | 19 | 0 | (8) |
| 2027 | 13 | (2) | 19 | (0) | (3) |
| 2028 | 18 | (1) | 20 | 2 | (2) |
| Valuation Method | Fair Price (USD) | Potential Upside |
|---|---|---|
| 5-Year DCF (Growth) | 0.00 | -314.3% |
| 10-Year DCF (Growth) | 0.00 | -155.1% |
| 5-Year DCF (EBITDA) | 0.00 | -100.0% |
| 10-Year DCF (EBITDA) | 0.61 | -94.4% |
Is IQE PLC (IQE.L) a buy or a sell? IQE PLC is definitely a sell. Based on our DCF analysis, IQE PLC (IQE.L) appears to be overvalued with upside potential of -155.1%. 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 $10.94.