As of May 24, 2025, Mimecast Ltd has a Discounted Cash Flow (DCF) derived fair value of $25.03 per share. With the current market price at $79.92, this represents a potential upside of -68.7%.
| Key Metrics | Value |
|---|---|
| DCF Fair Value (5-year) | $9.00 |
| DCF Fair Value (10-year) | $25.03 |
| Potential Upside (5-year) | -88.7% |
| Potential Upside (10-year) | -68.7% |
| Discount Rate (WACC) | 6.9% - 9.0% |
Revenue is projected to grow from $501 million in 03-2021 to $2155 million by 03-2031, representing a compound annual growth rate of approximately 15.7%.
| Fiscal Year | Revenue (USD millions) | Growth |
|---|---|---|
| 03-2021 | 501 | 17% |
| 03-2022 | 589 | 17% |
| 03-2023 | 682 | 16% |
| 03-2024 | 826 | 21% |
| 03-2025 | 975 | 18% |
| 03-2026 | 1133 | 16% |
| 03-2027 | 1337 | 18% |
| 03-2028 | 1535 | 15% |
| 03-2029 | 1733 | 13% |
| 03-2030 | 1949 | 12% |
| 03-2031 | 2155 | 11% |
Net profit margin is expected to improve from 6% in 03-2021 to 9% by 03-2031, driven by operational efficiency and economies of scale.
| Fiscal Year | Net Profit (USD millions) | Profit Margin |
|---|---|---|
| 03-2021 | 30 | 6% |
| 03-2022 | 32 | 5% |
| 03-2023 | 43 | 6% |
| 03-2024 | 59 | 7% |
| 03-2025 | 77 | 8% |
| 03-2026 | 97 | 9% |
| 03-2027 | 117 | 9% |
| 03-2028 | 136 | 9% |
| 03-2029 | 156 | 9% |
| 03-2030 | 178 | 9% |
| 03-2031 | 199 | 9% |
with a 5-year average of $35 million. Projected CapEx is expected to maintain at approximately 10% of revenue.
Depreciation is based on an average useful life of 5 years for capital assets.
| Fiscal Year | D&A (USD millions) |
|---|---|
| 03-2022 | 43 |
| 03-2023 | 50 |
| 03-2024 | 62 |
| 03-2025 | 71 |
| 03-2026 | 87 |
| 03-2027 | 102 |
Net working capital is expected to increase gradually, with projected changes affecting free cash flow.
| Components | Average Days |
|---|---|
| Days Receivables | 94 |
| Days Inventory | 0 |
| Days Payables | 40 |
| Fiscal Year | EBITDA | Tax | CapEx | Change in NWC | FCF |
|---|---|---|---|---|---|
| 3M/2022 | 22 | 3 | 15 | 4 | (1) |
| 2023 | 109 | 16 | 71 | 22 | 1 |
| 2024 | 142 | 22 | 85 | 37 | (2) |
| 2025 | 176 | 28 | 101 | 35 | 12 |
| 2026 | 220 | 36 | 117 | 39 | 28 |
| Valuation Method | Fair Price (USD) | Potential Upside |
|---|---|---|
| 5-Year DCF (Growth) | 9.00 | -88.7% |
| 10-Year DCF (Growth) | 25.03 | -68.7% |
| 5-Year DCF (EBITDA) | 20.93 | -73.8% |
| 10-Year DCF (EBITDA) | 34.76 | -56.5% |
Is Mimecast Ltd (MIME) a buy or a sell? Mimecast Ltd is definitely a sell. Based on our DCF analysis, Mimecast Ltd (MIME) appears to be overvalued with upside potential of -68.7%. 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 $79.92.