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Pepper Money Limited

Intrinsic Value Analysis (Discounted Cash Flow)Industry: Financial - Credit ServicesSector: Financial Services

Fair Value Summary

Current Price$2.20
5Y Range-57.99 – -41.65
5Y Selected-49.82
(-) Safety Margin78.62%
5Y Buy Price$-12.16
Upside (to Buy Price)-652.57%
10Y Range8.59 – 58.65
10Y Selected33.62
(-) Safety Margin78.62%
10Y Buy Price$8.20
Upside (to Buy Price)272.90%

Company Predictability & Safety

MetricValue
Revenue R2 (5Y)0.9068
Revenue R2 (10Y)0.6366
Net Income R2 (5Y)0.3317
Net Income R2 (10Y)0.3832
EBITDA R2 (5Y)0.8464
EBITDA R2 (10Y)0.7708
FCF R2 (5Y)0.6125
FCF R2 (10Y)0.0000
Safety Score0.2440

DA 10-Year Projection

Metric2025202620272028202920302031203220332034
% Growth32.73%29.54%26.35%23.15%19.96%16.77%13.58%10.38%7.19%4.00%
Revenue2,097.302,716.833,432.644,227.455,071.355,921.806,725.827,424.297,958.288,276.61
EBITDA903.841,170.831,479.311,821.842,185.522,552.022,898.523,199.533,429.653,566.84
D&A-48.25-62.50-78.96-97.25-116.66-136.22-154.72-170.78-183.07-190.39
EBIT855.591,108.331,400.351,724.592,068.862,415.802,743.803,028.743,246.583,376.45
Pro forma Taxes-248.58-322.01-406.85-501.06-601.08-701.88-797.18-879.97-943.26-980.99
NOPAT607.01786.32993.491,223.531,467.781,713.921,946.622,148.782,303.332,395.46
Capital Expenditures-46.12-59.74-75.48-92.95-111.51-130.21-147.89-163.25-174.99-181.99
NWC Investment-1,176.91-1,409.77-1,628.85-1,808.64-1,920.32-1,935.24-1,829.59-1,589.40-1,215.11-724.38
(+) D&A48.2562.5078.9697.25116.66136.22154.72170.78183.07190.39
Free Cash Flow-567.77-620.69-631.87-580.81-447.39-215.31123.86566.921,096.301,679.49
Diluted Shares Outstanding458,811,102.50458,811,102.50458,811,102.50458,811,102.50458,811,102.50458,811,102.50458,811,102.50458,811,102.50458,811,102.50458,811,102.50

Discounting Periods

MetricDec-25Dec-26Dec-27Dec-28Dec-29Dec-30Dec-31Dec-32Dec-33Dec-34
Period Start6/30/251/1/261/1/271/1/281/1/291/1/301/1/311/1/321/1/331/1/34
Period End12/31/2512/31/2612/31/2712/31/2812/31/2912/31/3012/31/3112/31/3212/31/3312/31/34
Mid-Point9/30/257/2/267/2/277/1/287/2/297/2/307/2/317/1/327/2/337/2/34
Time (t)0.100.461.462.463.464.465.466.467.468.46
Valuation Date1/16/26

Base Case Projected Flows

WACC: 6.60%Terminal Growth: 2.32%
Metric2025202620272028202920302031203220332034TV (5y)TV (10y)
Discount Factor0.990.970.910.850.800.750.710.660.620.58
PV UFCF-564.15-602.71-575.57-496.30-358.62-161.9087.37375.13680.51977.96
Raw: -10,688.98
-8,298.58
Raw: 40,126.02
22,630.28

Base Case Valuation

5-Year Horizon10-Year Horizon
UFCFUFCF
Enterprise Value-10,895.9321,992.00
(-) Net Debt10,652.7210,652.72
Equity Value-21,548.6511,339.28
(/) Shares Out458.81458.81
Fair Value$-46.97$24.71
(-) Safety Margin78.62%78.62%
Buy Price$-10.04$5.28
Current Price$2.20$2.20
Upside (to Buy Price)-556.43%140.18%

Conservative Projected Flows

WACC: 7.60%Terminal Growth: 1.82%
Metric2025202620272028202920302031203220332034TV (5y)TV (10y)
Discount Factor0.990.970.900.840.780.720.670.620.580.54
PV UFCF-563.62-600.13-567.78-485.03-347.22-155.3083.03353.18634.72903.68
Raw: -7,877.57
-5,893.89
Raw: 29,572.10
15,339.56

Conservative Valuation

5-Year Horizon10-Year Horizon
UFCFUFCF
Enterprise Value-8,457.6614,595.09
(-) Net Debt10,652.7210,652.72
Equity Value-19,110.383,942.37
(/) Shares Out458.81458.81
Fair Value$-41.65$8.59
(-) Safety Margin78.62%78.62%
Buy Price$-8.91$1.84
Current Price$2.20$2.20
Upside (to Buy Price)-504.78%-16.50%

Aggressive Projected Flows

WACC: 5.60%Terminal Growth: 2.82%
Metric2025202620272028202920302031203220332034TV (5y)TV (10y)
Discount Factor0.990.980.920.870.830.780.740.700.670.63
PV UFCF-564.68-605.33-583.54-507.94-370.51-168.8591.99398.68730.081,059.13
Raw: -16,531.48
-13,322.59
Raw: 62,058.57
38,083.87

Aggressive Valuation

5-Year Horizon10-Year Horizon
UFCFUFCF
Enterprise Value-15,954.5937,562.89
(-) Net Debt10,652.7210,652.72
Equity Value-26,607.3126,910.17
(/) Shares Out458.81458.81
Fair Value$-57.99$58.65
(-) Safety Margin78.62%78.62%
Buy Price$-12.40$12.54
Current Price$2.20$2.20
Upside (to Buy Price)-663.58%469.99%

Reverse DCF: Market Implied Growth

Current Price$2.20
WACC Used6.6%
IMPLIED REVENUE GROWTH125.47%
Metric2027202820292030203120322033203420352036
Implied Revenue5,786.4613,046.7329,416.4666,325.29149,543.62337,175.96760,230.531,714,091.553,864,761.718,713,877.11
Constant Implied Growth125.47%125.47%125.47%125.47%125.47%125.47%125.47%125.47%125.47%125.47%
Implied Free Cash Flow0.581.302.946.6314.9533.7276.02171.41386.48871.39
Discount Factor0.960.850.800.750.710.660.620.580.550.51
Present Value of Implied FCF0.551.112.364.9910.5522.3147.1999.81211.11446.51

Rolling Historical DCF (Backtest)

Valuation based on actual realized growth.
YearValuation DateActual PriceRealized Growth (5Y)Calculated Fair ValueValuation Delta
20192019-12-31$2.6118.46%$-40.77-1,662.23%
20182018-12-31$2.6177.88%$104.163,890.65%
20172017-12-31$2.6132.80%$-7.65-393.20%
20162016-12-31$2.6111.30%$-10.68-509.35%
20152015-12-31$2.61-29.34%$-32.12-1,330.80%
20142014-12-31$2.61-65.10%$-35.92-1,476.16%
20132013-12-31$2.61-5.82%$0.00-100.00%
20122012-12-31$2.61-130.87%$0.00-100.00%

Monte Carlo Simulation (1,000 Iterations)

Mean Fair Value
$30.31
Median
$24.91
10th Percentile
$8.73
90th Percentile
$58.94

Fair Value Distribution

$-3.69 - $3.57
26
$3.57 - $10.84
119
$10.84 - $18.10
196
$18.10 - $25.36
172
$25.36 - $32.62
144
$32.62 - $39.88
105
$39.88 - $47.15
67
$47.15 - $54.41
45
$54.41 - $61.67
38
$61.67 - $68.93
24
$68.93 - $76.20
19
$76.20 - $83.46
7
$83.46 - $90.72
9
$90.72 - $97.98
10
$97.98 - $105.25
7
$105.25 - $112.51
4
$112.51 - $119.77
2
$119.77 - $127.03
4
$127.03 - $134.30
0
$134.30 - $141.56
2