As of May 27, 2025, Starcom PLC has a Discounted Cash Flow (DCF) derived fair value of $15.09 per share. With the current market price at $6.71, this represents a potential upside of 124.9%.
| Key Metrics | Value |
|---|---|
| DCF Fair Value (5-year) | $13.57 |
| DCF Fair Value (10-year) | $15.09 |
| Potential Upside (5-year) | 102.2% |
| Potential Upside (10-year) | 124.9% |
| Discount Rate (WACC) | 8.2% - 9.5% |
Revenue is projected to grow from $49 million in 12-2023 to $56 million by 12-2033, representing a compound annual growth rate of approximately 1.3%.
| Fiscal Year | Revenue (USD millions) | Growth |
|---|---|---|
| 12-2023 | 49 | 16% |
| 12-2024 | 45 | -8% |
| 12-2025 | 46 | 2% |
| 12-2026 | 47 | 2% |
| 12-2027 | 48 | 2% |
| 12-2028 | 49 | 2% |
| 12-2029 | 51 | 4% |
| 12-2030 | 52 | 2% |
| 12-2031 | 53 | 2% |
| 12-2032 | 55 | 3% |
| 12-2033 | 56 | 2% |
Net profit margin is expected to improve from -11% in 12-2023 to 4% by 12-2033, driven by operational efficiency and economies of scale.
| Fiscal Year | Net Profit (USD millions) | Profit Margin |
|---|---|---|
| 12-2023 | (5) | -11% |
| 12-2024 | 2 | 4% |
| 12-2025 | 2 | 4% |
| 12-2026 | 2 | 4% |
| 12-2027 | 2 | 4% |
| 12-2028 | 2 | 4% |
| 12-2029 | 2 | 4% |
| 12-2030 | 2 | 4% |
| 12-2031 | 2 | 4% |
| 12-2032 | 2 | 4% |
| 12-2033 | 2 | 4% |
with a 5-year average of $7 million. Projected CapEx is expected to maintain at approximately 20% of revenue.
Depreciation is based on an average useful life of 5 years for capital assets.
| Fiscal Year | D&A (USD millions) |
|---|---|
| 12-2024 | 8 |
| 12-2025 | 8 |
| 12-2026 | 9 |
| 12-2027 | 9 |
| 12-2028 | 9 |
| 12-2029 | 10 |
Net working capital is expected to increase gradually, with projected changes affecting free cash flow.
| Components | Average Days |
|---|---|
| Days Receivables | 33 |
| Days Inventory | 18 |
| Days Payables | 31 |
| Fiscal Year | EBITDA | Tax | CapEx | Change in NWC | FCF |
|---|---|---|---|---|---|
| 6M/2024 | 6 | 0 | 4 | 1 | 0 |
| 2025 | 12 | 1 | 9 | (0) | 3 |
| 2026 | 13 | 1 | 9 | (0) | 3 |
| 2027 | 13 | 1 | 9 | 0 | 3 |
| 2028 | 14 | 1 | 10 | (0) | 3 |
| Valuation Method | Fair Price (USD) | Potential Upside |
|---|---|---|
| 5-Year DCF (Growth) | 13.57 | 102.2% |
| 10-Year DCF (Growth) | 15.09 | 124.9% |
| 5-Year DCF (EBITDA) | 21.57 | 221.5% |
| 10-Year DCF (EBITDA) | 21.01 | 213.1% |
Is Starcom PLC (STAR.L) a buy or a sell? Starcom PLC is definitely a buy. Based on our DCF analysis, Starcom PLC (STAR.L) appears to be significantly undervalued with upside potential of 124.9%. 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 $6.71.