As of June 18, 2025, Telus International Cda Inc has a Discounted Cash Flow (DCF) derived fair value of $9.58 per share. With the current market price at $4.94, this represents a potential upside of 93.9%.
| Key Metrics | Value |
|---|---|
| DCF Fair Value (5-year) | $6.41 |
| DCF Fair Value (10-year) | $9.58 |
| Potential Upside (5-year) | 29.7% |
| Potential Upside (10-year) | 93.9% |
| Discount Rate (WACC) | 4.4% - 12.2% |
Revenue is projected to grow from $2658 million in 12-2024 to $4886 million by 12-2034, representing a compound annual growth rate of approximately 6.3%.
| Fiscal Year | Revenue (USD millions) | Growth |
|---|---|---|
| 12-2024 | 2658 | 2% |
| 12-2025 | 2757 | 4% |
| 12-2026 | 2852 | 3% |
| 12-2027 | 3012 | 6% |
| 12-2028 | 3170 | 5% |
| 12-2029 | 3471 | 9% |
| 12-2030 | 3777 | 9% |
| 12-2031 | 4010 | 6% |
| 12-2032 | 4333 | 8% |
| 12-2033 | 4545 | 5% |
| 12-2034 | 4886 | 7% |
Net profit margin is expected to improve from -2% in 12-2024 to 1% by 12-2034, driven by operational efficiency and economies of scale.
| Fiscal Year | Net Profit (USD millions) | Profit Margin |
|---|---|---|
| 12-2024 | (61) | -2% |
| 12-2025 | (8) | 0% |
| 12-2026 | (1) | 0% |
| 12-2027 | 6 | 0% |
| 12-2028 | 14 | 0% |
| 12-2029 | 24 | 1% |
| 12-2030 | 26 | 1% |
| 12-2031 | 27 | 1% |
| 12-2032 | 29 | 1% |
| 12-2033 | 31 | 1% |
| 12-2034 | 33 | 1% |
with a 5-year average of $91 million. Projected CapEx is expected to maintain at approximately 4% of revenue.
Depreciation is based on an average useful life of 5 years for capital assets.
| Fiscal Year | D&A (USD millions) |
|---|---|
| 12-2025 | 101 |
| 12-2026 | 104 |
| 12-2027 | 107 |
| 12-2028 | 114 |
| 12-2029 | 121 |
| 12-2030 | 129 |
Net working capital is expected to increase gradually, with projected changes affecting free cash flow.
| Components | Average Days |
|---|---|
| Days Receivables | 64 |
| Days Inventory | 0 |
| Days Payables | 9 |
| Fiscal Year | EBITDA | Tax | CapEx | Change in NWC | FCF |
|---|---|---|---|---|---|
| 9M/2025 | 171 | (3) | 82 | 41 | 51 |
| 2026 | 246 | (1) | 113 | 15 | 119 |
| 2027 | 267 | 3 | 119 | 15 | 131 |
| 2028 | 294 | 6 | 125 | 36 | 126 |
| 2029 | 330 | 11 | 137 | 50 | 132 |
| Valuation Method | Fair Price (USD) | Potential Upside |
|---|---|---|
| 5-Year DCF (Growth) | 6.41 | 29.7% |
| 10-Year DCF (Growth) | 9.58 | 93.9% |
| 5-Year DCF (EBITDA) | 1.17 | -76.3% |
| 10-Year DCF (EBITDA) | 4.38 | -11.4% |
Is Telus International Cda Inc (TIXT.TO) a buy or a sell? Telus International Cda Inc is definitely a buy. Based on our DCF analysis, Telus International Cda Inc (TIXT.TO) appears to be significantly undervalued with upside potential of 93.9%. 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 $4.94.