As of June 18, 2025, Tecsys Inc has a Discounted Cash Flow (DCF) derived fair value of $64.27 per share. With the current market price at $40.14, this represents a potential upside of 60.1%.
| Key Metrics | Value |
|---|---|
| DCF Fair Value (5-year) | $41.18 |
| DCF Fair Value (10-year) | $64.27 |
| Potential Upside (5-year) | 2.6% |
| Potential Upside (10-year) | 60.1% |
| Discount Rate (WACC) | 4.9% - 7.5% |
Revenue is projected to grow from $171 million in 04-2024 to $347 million by 04-2034, representing a compound annual growth rate of approximately 7.3%.
| Fiscal Year | Revenue (USD millions) | Growth |
|---|---|---|
| 04-2024 | 171 | 12% |
| 04-2025 | 175 | 2% |
| 04-2026 | 195 | 11% |
| 04-2027 | 208 | 7% |
| 04-2028 | 222 | 7% |
| 04-2029 | 244 | 10% |
| 04-2030 | 266 | 9% |
| 04-2031 | 287 | 8% |
| 04-2032 | 302 | 5% |
| 04-2033 | 320 | 6% |
| 04-2034 | 347 | 8% |
Net profit margin is expected to improve from 1% in 04-2024 to 11% by 04-2034, driven by operational efficiency and economies of scale.
| Fiscal Year | Net Profit (USD millions) | Profit Margin |
|---|---|---|
| 04-2024 | 2 | 1% |
| 04-2025 | 5 | 3% |
| 04-2026 | 9 | 5% |
| 04-2027 | 13 | 6% |
| 04-2028 | 18 | 8% |
| 04-2029 | 23 | 9% |
| 04-2030 | 26 | 10% |
| 04-2031 | 29 | 10% |
| 04-2032 | 31 | 10% |
| 04-2033 | 34 | 11% |
| 04-2034 | 38 | 11% |
with a 5-year average of $1 million. Projected CapEx is expected to maintain at approximately 1% of revenue.
Depreciation is based on an average useful life of 5 years for capital assets.
| Fiscal Year | D&A (USD millions) |
|---|---|
| 04-2025 | 1 |
| 04-2026 | 1 |
| 04-2027 | 1 |
| 04-2028 | 1 |
| 04-2029 | 2 |
| 04-2030 | 2 |
Net working capital is expected to increase gradually, with projected changes affecting free cash flow.
| Components | Average Days |
|---|---|
| Days Receivables | 28 |
| Days Inventory | 12 |
| Days Payables | 11 |
| Fiscal Year | EBITDA | Tax | CapEx | Change in NWC | FCF |
|---|---|---|---|---|---|
| 3M/2025 | 2 | 1 | 0 | 3 | (2) |
| 2026 | 14 | 4 | 2 | (2) | 10 |
| 2027 | 20 | 6 | 2 | (2) | 14 |
| 2028 | 26 | 8 | 2 | 4 | 13 |
| 2029 | 34 | 10 | 2 | 0 | 22 |
| Valuation Method | Fair Price (USD) | Potential Upside |
|---|---|---|
| 5-Year DCF (Growth) | 41.18 | 2.6% |
| 10-Year DCF (Growth) | 64.27 | 60.1% |
| 5-Year DCF (EBITDA) | 60.21 | 50.0% |
| 10-Year DCF (EBITDA) | 89.35 | 122.6% |
Is Tecsys Inc (TCS.TO) a buy or a sell? Tecsys Inc is definitely a buy. Based on our DCF analysis, Tecsys Inc (TCS.TO) appears to be significantly undervalued with upside potential of 60.1%. 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 a strong buy at the current market price of $40.14.