As of June 21, 2025, TMX Group Ltd has a Discounted Cash Flow (DCF) derived fair value of $73.11 per share. With the current market price at $56.67, this represents a potential upside of 29.0%.
| Key Metrics | Value |
|---|---|
| DCF Fair Value (5-year) | $66.84 |
| DCF Fair Value (10-year) | $73.11 |
| Potential Upside (5-year) | 18.0% |
| Potential Upside (10-year) | 29.0% |
| Discount Rate (WACC) | 5.1% - 6.9% |
Revenue is projected to grow from $2973 million in 12-2024 to $2402 million by 12-2034, representing a compound annual growth rate of approximately -2.1%.
| Fiscal Year | Revenue (USD millions) | Growth |
|---|---|---|
| 12-2024 | 2973 | 3% |
| 12-2025 | 1686 | -43% |
| 12-2026 | 1789 | 6% |
| 12-2027 | 1933 | 8% |
| 12-2028 | 1986 | 3% |
| 12-2029 | 2077 | 5% |
| 12-2030 | 2142 | 3% |
| 12-2031 | 2224 | 4% |
| 12-2032 | 2309 | 4% |
| 12-2033 | 2355 | 2% |
| 12-2034 | 2402 | 2% |
Net profit margin is expected to improve from 18% in 12-2024 to 27% by 12-2034, driven by operational efficiency and economies of scale.
| Fiscal Year | Net Profit (USD millions) | Profit Margin |
|---|---|---|
| 12-2024 | 527 | 18% |
| 12-2025 | 317 | 19% |
| 12-2026 | 369 | 21% |
| 12-2027 | 432 | 22% |
| 12-2028 | 476 | 24% |
| 12-2029 | 530 | 26% |
| 12-2030 | 553 | 26% |
| 12-2031 | 581 | 26% |
| 12-2032 | 610 | 26% |
| 12-2033 | 629 | 27% |
| 12-2034 | 648 | 27% |
with a 5-year average of $62 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 | 61 |
| 12-2026 | 65 |
| 12-2027 | 69 |
| 12-2028 | 71 |
| 12-2029 | 72 |
| 12-2030 | 75 |
Net working capital is expected to increase gradually, with projected changes affecting free cash flow.
| Components | Average Days |
|---|---|
| Days Receivables | 20 |
| Days Inventory | 0 |
| Days Payables | 0 |
| Fiscal Year | EBITDA | Tax | CapEx | Change in NWC | FCF |
|---|---|---|---|---|---|
| 9M/2025 | 377 | 79 | 48 | (49) | 299 |
| 2026 | 576 | 123 | 68 | (3) | 388 |
| 2027 | 666 | 144 | 73 | 12 | 437 |
| 2028 | 728 | 159 | 75 | 3 | 492 |
| 2029 | 802 | 177 | 79 | 3 | 544 |
| Valuation Method | Fair Price (USD) | Potential Upside |
|---|---|---|
| 5-Year DCF (Growth) | 66.84 | 18.0% |
| 10-Year DCF (Growth) | 73.11 | 29.0% |
| 5-Year DCF (EBITDA) | 38.60 | -31.9% |
| 10-Year DCF (EBITDA) | 44.64 | -21.2% |
Is TMX Group Ltd (X.TO) a buy or a sell? TMX Group Ltd is definitely a buy. Based on our DCF analysis, TMX Group Ltd (X.TO) appears to be significantly undervalued with upside potential of 29.0%. 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 $56.67.