As of June 10, 2025, Xaar PLC has a Discounted Cash Flow (DCF) derived fair value of $80.89 per share. With the current market price at $120.50, this represents a potential upside of -32.9%.
| Key Metrics | Value |
|---|---|
| DCF Fair Value (5-year) | $46.56 |
| DCF Fair Value (10-year) | $80.89 |
| Potential Upside (5-year) | -61.4% |
| Potential Upside (10-year) | -32.9% |
| Discount Rate (WACC) | 7.1% - 9.9% |
Revenue is projected to grow from $61 million in 12-2024 to $118 million by 12-2034, representing a compound annual growth rate of approximately 6.8%.
| Fiscal Year | Revenue (USD millions) | Growth |
|---|---|---|
| 12-2024 | 61 | 13% |
| 12-2025 | 75 | 22% |
| 12-2026 | 78 | 5% |
| 12-2027 | 80 | 2% |
| 12-2028 | 82 | 3% |
| 12-2029 | 87 | 5% |
| 12-2030 | 93 | 7% |
| 12-2031 | 96 | 3% |
| 12-2032 | 103 | 7% |
| 12-2033 | 108 | 5% |
| 12-2034 | 118 | 10% |
Net profit margin is expected to improve from -17% in 12-2024 to -2% by 12-2034, driven by operational efficiency and economies of scale.
| Fiscal Year | Net Profit (USD millions) | Profit Margin |
|---|---|---|
| 12-2024 | (11) | -17% |
| 12-2025 | (10) | -14% |
| 12-2026 | (9) | -11% |
| 12-2027 | (7) | -8% |
| 12-2028 | (5) | -6% |
| 12-2029 | (3) | -4% |
| 12-2030 | (3) | -3% |
| 12-2031 | (3) | -3% |
| 12-2032 | (2) | -2% |
| 12-2033 | (2) | -2% |
| 12-2034 | (2) | -2% |
with a 5-year average of $3 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 | 3 |
| 12-2026 | 3 |
| 12-2027 | 3 |
| 12-2028 | 3 |
| 12-2029 | 3 |
| 12-2030 | 3 |
Net working capital is expected to increase gradually, with projected changes affecting free cash flow.
| Components | Average Days |
|---|---|
| Days Receivables | 19 |
| Days Inventory | 251 |
| Days Payables | 0 |
| Fiscal Year | EBITDA | Tax | CapEx | Change in NWC | FCF |
|---|---|---|---|---|---|
| 2025 | (1) | (1) | 3 | 8 | (11) |
| 2026 | 1 | (1) | 3 | (2) | 1 |
| 2027 | 2 | (1) | 3 | (1) | 1 |
| 2028 | 5 | (1) | 3 | 0 | 2 |
| 2029 | 8 | (0) | 4 | (0) | 5 |
| Valuation Method | Fair Price (USD) | Potential Upside |
|---|---|---|
| 5-Year DCF (Growth) | 46.56 | -61.4% |
| 10-Year DCF (Growth) | 80.89 | -32.9% |
| 5-Year DCF (EBITDA) | 48.11 | -60.1% |
| 10-Year DCF (EBITDA) | 93.27 | -22.6% |
Is Xaar PLC (XAR.L) a buy or a sell? Xaar PLC is definitely a sell. Based on our DCF analysis, Xaar PLC (XAR.L) appears to be overvalued with upside potential of -32.9%. 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 reducing exposure at the current market price of $120.50.