DCF Analysis Using the StockWatch Method
1. Key Assumptions and Input Data
- Beta (β): 1.40 (5-year data) – indicates above-average market volatility
- Risk-Free Rate: ~4.3% (10-year US Treasury yield)
- Market Risk Premium: 5.5%
- Discount Rate (Cost of Equity):r=4.3%+1.40×5.5%=12.0%r = 4.3\% + 1.40 \times 5.5\% = \mathbf{12.0\%}
- Free Cash Flow (FCF) History:
- 2020: –€117M
- 2021: –€104M
- 2022: +€101M
- 2023: +€168M
- 2024: +€254M
- Net Debt (end 2024 est.): ~€2.77 billion
- Shares Outstanding (2025): ~65.4 million
2. Projected Free Cash Flows (2025–2029)
Year Projected FCF Discount Factor @ 12% Present Value 2025 €50M 0.893 €44.6M 2026 €100M 0.797 €79.7M 2027 €100M 0.712 €71.2M 2028 €130M 0.636 €82.7M 2029 €150M 0.567 €85.1M €363.3M
Note: Low FCFs reflect reinvestment in expansion. Most value must come from the terminal phase.
3. Terminal Value Estimation
a) Perpetual Growth Method
TVperpetual=FCF2029×(1+g)r−g=€150M×1.020.12−0.02=€1,530MTV_{perpetual} = \frac{FCF_{2029} \times (1 + g)}{r - g} = \frac{€150M \times 1.02}{0.12 - 0.02} = \mathbf{€1,530M}
Discounted to end of 2024:
PV(TVperpetual)=€1,530M(1.12)5≈€868.2MPV(TV_{perpetual}) = \frac{€1,530M}{(1.12)^5} ≈ \mathbf{€868.2M}
b) Exit Multiple Method (10× EBITDA)
- Est. 2029 Revenue: €1.8–2.0B
- EBITDA Margin: ~46% (based on 2023 level)
- EBITDA 2029 Estimate: €900M
- Exit Multiple: 10× →
TVexit=€900M×10=€9,000MTV_{exit} = €900M \times 10 = \mathbf{€9,000M}
Discounted:
PV(TVexit)=€9,000M(1.12)5≈€5,107MPV(TV_{exit}) = \frac{€9,000M}{(1.12)^5} ≈ \mathbf{€5,107M}
Note: FCF multiples would undervalue Basic-Fit due to capex. EBITDA multiple better reflects underlying operating value.
4. Enterprise and Equity Value
Enterprise Value (EV):
- Perpetual Growth: EV = €363.3M + €868.2M = €1,231.5M
- Exit Multiple: EV = €363.3M + €5,107M = €5,470.3M
Equity Value:
- Perpetual Growth: Equity = €1,231.5M – €2,767M = –€1,535M (no value left for shareholders)
- Exit Multiple: Equity = €5,470.3M – €2,767M = €2,703.3M → Per-share intrinsic value = €2,703.3M / 65.4M = €41.3 per share
Conclusion: Only the exit-multiple scenario yields positive equity value. The perpetual scenario is overly conservative and ignores long-term growth payoff.
5. Price Target with Margin of Safety
Apply 15% margin of safety to the €41.3 intrinsic value:
Price Target=0.85×€41.3≈€35.0 per sharePrice\ Target = 0.85 \times €41.3 ≈ \mathbf{€35.0\ per\ share}
This target is above the current market price (~€25), indicating upside potential.
✅ Final Conclusion
- Fair Value (exit-multiple): €41.3
- Conservative Price Target (with 15% margin): €35.0
- Current Market Price (July 2025): ~€25
According to this DCF analysis, Basic-Fit appears undervalued assuming continued club expansion and eventual FCF scaling. The exit-multiple method offers a more realistic valuation than the perpetuity approach in the context of high-growth reinvestment.
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Disclaimer
The user Ivoed has a position in ENXTAM:BFIT. Simply Wall St has no position in any of the companies mentioned. Simply Wall St may provide the securities issuer or related entities with website advertising services for a fee, on an arm's length basis. These relationships have no impact on the way we conduct our business, the content we host, or how our content is served to users. The author of this narrative is not affiliated with, nor authorised by Simply Wall St as a sub-authorised representative. This narrative is general in nature and explores scenarios and estimates created by the author. The narrative does not reflect the opinions of Simply Wall St, and the views expressed are the opinion of the author alone, acting on their own behalf. These scenarios are not indicative of the company's future performance and are exploratory in the ideas they cover. The fair value estimates are estimations only, and does not constitute a recommendation to buy or sell any stock, and they do not take account of your objectives, or your financial situation. Note that the author's analysis may not factor in the latest price-sensitive company announcements or qualitative material.
