What is PRSM.L's DCF valuation?

Blue Prism Group PLC (PRSM.L) DCF Valuation Analysis

Executive Summary

As of May 23, 2025, Blue Prism Group PLC has a Discounted Cash Flow (DCF) derived fair value of $0.00 per share. With the current market price at $0.00, this represents a potential upside of -632.4%.

Key Metrics Value
DCF Fair Value (5-year) $0.00
DCF Fair Value (10-year) $0.00
Potential Upside (5-year) -336.8%
Potential Upside (10-year) -632.4%
Discount Rate (WACC) 6.7% - 9.6%

Financial Performance & Projections

Revenue Trends

Revenue is projected to grow from $167 million in 10-2021 to $2039 million by 10-2031, representing a compound annual growth rate of approximately 28.4%.

Fiscal Year Revenue (USD millions) Growth
10-2021 167 18%
10-2022 207 24%
10-2023 243 18%
10-2024 356 46%
10-2025 494 39%
10-2026 647 31%
10-2027 834 29%
10-2028 1068 28%
10-2029 1337 25%
10-2030 1656 24%
10-2031 2039 23%

Profitability Projections

Net profit margin is expected to improve from -31% in 10-2021 to -24% by 10-2031, driven by operational efficiency and economies of scale.

Fiscal Year Net Profit (USD millions) Profit Margin
10-2021 (51) -31%
10-2022 (59) -28%
10-2023 (67) -27%
10-2024 (95) -27%
10-2025 (127) -26%
10-2026 (161) -25%
10-2027 (206) -25%
10-2028 (263) -25%
10-2029 (327) -24%
10-2030 (403) -24%
10-2031 (493) -24%

DCF Model Components

1. Capital Expenditures (CapEx)

with a 5-year average of $2 million. Projected CapEx is expected to maintain at approximately 2% of revenue.

2. Depreciation & Amortization

Depreciation is based on an average useful life of 5 years for capital assets.

Fiscal Year D&A (USD millions)
10-2022 2
10-2023 3
10-2024 4
10-2025 6
10-2026 8
10-2027 11

3. Working Capital Requirements

Net working capital is expected to increase gradually, with projected changes affecting free cash flow.

Components Average Days
Days Receivables 113
Days Inventory 0
Days Payables 163

4. Free Cash Flow Projections

Fiscal Year EBITDA Tax CapEx Change in NWC FCF
2022 (52) (1) 4 5 (60)
2023 (58) (1) 5 11 (73)
2024 (83) (2) 7 28 (117)
2025 (110) (3) 10 33 (151)
2026 (138) (3) 13 40 (188)

DCF Valuation Parameters

Key Assumptions

  • Discount Rate (WACC): WACC / Discount Rate (selected: 6.7% - 9.6%)
  • Long-Term Growth Rate: Long-term Growth Rate (selected: 3.0% - 5.0%)
  • Terminal EV/EBITDA Multiple: 10.1x (based on peer average)

Valuation Summary

Valuation Method Fair Price (USD) Potential Upside
5-Year DCF (Growth) 0.00 -336.8%
10-Year DCF (Growth) 0.00 -632.4%
5-Year DCF (EBITDA) 0.00 NaN%
10-Year DCF (EBITDA) 0.00 NaN%

Enterprise Value Breakdown

  • 5-Year Model: $(3,055)M
  • 10-Year Model: $(6,716)M

Investment Conclusion

Is Blue Prism Group PLC (PRSM.L) a buy or a sell? Blue Prism Group PLC is definitely a sell. Based on our DCF analysis, Blue Prism Group PLC (PRSM.L) appears to be overvalued with upside potential of -632.4%. 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:

  • Expanding profit margins (from -31% to -24%)
  • Steady revenue growth (28.4% CAGR)
  • Strong free cash flow generation

Investors should consider reducing exposure at the current market price of $0.00.