Market Cap vs Intrinsic Value (SKC, SKT, TRH, TTK, WHS)

Below are high level valuations for SKC, SKT, TRH, TTK and WHS. They compare the current market cap to my estimate of each companies’ intrinsic value. The list below also shows the growth expectation of the market.

For example I have assumed Teamtalk’s revenue continues to decline by 1% year, while the current market has priced in a revenue decline of 5% a year.

Company: Market cap / intrinsic value

  • Sky City: 1.15
  • Sky TV: 1.00
  • Toll: 4.70
  • Teamtalk: 0.63
  • Warehouse: 1.88

Company: Revenue growth rate implied by current market cap

  • Sky City: 14% to 3% over the next 10 years
  • Sky TV: 12% to 3% over the next 10 years
  • Toll: 14% each year till 2016
  • Teamtalk: -5% each year till 2016
  • Warehouse: 11% each year till 2016


  • Valuation based on a 10 year DCF model.
  • Historical revenue growth assumed to move toward long term growth rate assumption over ten years.
  • Forecast EBTIDA margins historical rates.
  • Deprecation and capital expenditure based on historical levels, but forecast to grow with revenue.
  • Discount rate and asset betas from PwC Cost of Capital report (pdf).
  • Long term growth rate of 3%.


2 Responses to Market Cap vs Intrinsic Value (SKC, SKT, TRH, TTK, WHS)

  1. Sam says:

    Interesting post. Just to clarify the ratios, you are talking about the intrinsic value of the equity not the enterprise value?

  2. bertfresno says:

    Thanks for the comment. The ratios are the intrinsic value to the sharehholders, so yes equity rather than enterprise value.

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