Venture capital firm Sequoia is joining Singapore’s GIC and U.S. investor Coatue in a funding round for Anthropic, which aims to raise $25 billion at a $350 billion valuation, the Financial Times reported on Sunday, citing sources familiar with the matter.
Singapore’s sovereign wealth fund GIC, and Coatue will contribute $1.5 billion each for the Claude chatbot-maker, the newspaper said.
Sequoia, Anthropic, GIC and Coatue did not immediately respond to a Reuters request for comment. Reuters could not immediately verify the report.
Last year, Anthropic secured commitments from Microsoft and Nvidia totaling up to $15 billion.
Insatiable demand for AI and growing enterprise adoption have driven tech spending higher globally, pushing valuations of AI startups like Anthropic to record levels, even as concerns about an AI bubble loom.
Anthropic last raised $13 billion in a Series F round that valued the company at $183 billion, the company said in early September.
California-based Sequoia, founded in 1972, was an early investor in many top tech names, including Google, Apple, Cisco and YouTube.
Some people think of the stock market as a place to buy shares low and sell high, banking a profit from the share price difference. This is one way that the market works. Yet another way is to use dividend shares and banking income to generate a generous second income. Here’s how.
To generate a monthly passive income, an investor would need to hold a diversified portfolio of stocks. It’s incredibly rare to own a single company and expect to receive dividends every month. Further, it’s a high-risk play to own a single company and hope the dividend keeps getting paid and don’t get cut. If this happens in the future, the overall strategy falls apart. Rather, if someone owns a dozen or more stocks, the impact can be minimised.
A lot of focus will be on making the capital work hard. As such, I don’t see much value in buying stocks with a divdend yield at or below the index average. For example, the FTSE 100 average yield is currently 2.92%. So the strategy would be to target FTSE shares with a yield well in excess of this. Based on what other stocks offer, I think a sustainable portfolio can be built with shares yielding around 7%.
In theory, let’s assume someone invested £600 a month in a portfolio yielding 7% and reinvested the proceeds. By year 15, this could be paying out an average of £1,055 a month. Of course, it’s impossible to say for certain that the goal will be reached at this point. Planning this far into the future isn’t an exact science, and many factors could mean it takes longer (or shorter) to achieve.
One idea to include in this portfolio could be ZIGUP (LSE:ZIG). It’s a FTSE 250-listed mobility services group, with the share price up 28% over the past year. It currently has a dividend yield bang on 7%.
The business primarily makes money from charging clients to use commercial vehicles. Rental revenue has been a major driver of growth, especially with higher demand in Spain and the UK. Half-year results from December showed revenue up 16.3% for Spain. In comparison, UK and Ireland revenue was up 6.5%.
At the same time, it generates recurring income from maintenance, repair, and fleet-management contracts. This is the part of the business that provides steady revenue and helps to ensure the dividend is covered from earnings. In fact, the latest dividend cover ratio is 2.9, which means the earnings can cover the latest dividend almost three times over.
In terms of risks, business demand tends to follow the broader economic cycle. If we saw a downturn in the UK and Europe, people might decide to cut back on vehicle hire. Or the company might have to cut profit margins to sustain demand.
Oracle’s all-out push into artificial intelligence infrastructure has pushed its debt into junk bond territory.
Though CoreWeave’s revenue is growing at lightning speed, so too is its substantial debt load.
10 stocks we like better than CoreWeave ›
There is a lot of talk of an artificial intelligence (AI) bubble. Echoes of 2000 are hard to ignore, with valuations reaching record highs and companies spending eye-watering amounts on infrastructure, racing to build as many colossal AI data centers as possible. While it is possible that we are not in a bubble and it truly is “different this time,” it’s not unreasonable to see the current trends as unsustainable.
If this is a bubble, there are a few stocks I wouldn’t want to own. Here are two of the riskiest.
The latest bout of bubble anxiety intensified after Oracle‘s (NYSE: ORCL) latest earnings report. While revenue and profits were up, the company is doubling down on its AI spending and borrowing heavily to fund it. Capital expenditures in the latest quarter jumped 200% year over year and were 50% higher than Wall Street expected. Management said it now expects to lay out roughly $50 billion in capex in its fiscal 2026, a massive increase from the $35 billion it had previously projected.
Oracle doesn’t have the cash flow to fund that kind of buildout without leaning heavily on the debt markets. In September, the company raised $18 billion in one of the largest bond sales in tech sector history, and it is targeting even higher amounts in the coming year. Though the company itself has maintained an investment-grade credit rating, yields on its bonds have slipped into junk bond territory.
Oracle’s five-year credit default swaps — essentially insurance against the company failing to repay its debts — have tripled in price in recent months and are now trading at levels not seen on Wall Street since the global financial crisis.
This is, in large part, because Oracle is borrowing so aggressively primarily to serve one customer: OpenAI. The creator of ChatGPT has committed to spending $300 billion over the next five years on Oracle’s services.
That’s an eye-popping number for a company that remains deeply unprofitable and whose competitive moat, in my opinion, has become more of a small stream at this point. OpenAI is still burning cash, and its annualized revenue is roughly a fifth of what it has committed to spend with Oracle each year. The reality is that OpenAI will need to continue to raise unprecedented amounts of capital to pay its bills.
While AI data center operator CoreWeave (NASDAQ: CRWV) has tripled its revenue over the past year, that growth is being financed with an enormous amount of expensive debt.
Including its lease obligations, CoreWeave carries about $15 billion of debt — nearly four times its total revenue over the last 12 months. And this isn’t cheap financing. The company paid $311 million last quarter just to cover the interest on its debt. Up nearly 200% year over year, its interest expense is now more than a fifth of its total revenue and roughly six times its gross profit.
And like Oracle, CoreWeave has an untenable degree of customer concentration. Nearly all of its revenues come from just a handful of customers, including Microsoft and other hyperscalers.
Image source: Getty Images.
If the AI bubble truly bursts, the implications for CoreWeave would be existential. But it wouldn’t take a full-blown collapse for the company to be in serious trouble. Its key customers are also its competitors, and unless AI demand continues to expand at such a rapid pace that the hyperscalers remain unable to meet it with their own cloud infrastructure, Microsoft and its peers are likely to prefer to bring more of the workloads in-house and eliminate the middleman, CoreWeave.
And while the company does have some protection in the form of a $6.3 billion Nvidia backstop agreement, that cushion won’t be enough to sustain it if demand for AI processing power cools meaningfully.
These are just two of the many stocks that could collapse if the AI bubble bursts — other neocloud providers such as Nebius would plunge as well. So too would many of the AI hardware providers like Super Micro Computer, as well as a host of start-ups directly or indirectly related to AI that are trading at incredible valuations despite having little or no revenue, such as small modular nuclear reactor specialist Oklo and quantum computing pure plays Rigetti Computing and D-Wave Quantum.
No one can yet say for certain whether the AI sector really is in a bubble, but even the most confident bulls can’t deny that the scale of spending in the space is unprecedented and that the fervor surrounding AI mirrors that of past bubbles.
If this is a bubble, just as with bubbles of the past, there will be companies that will not only survive its bursting, but thrive in the aftermath. CoreWeave and Oracle will not be among them.
Before you buy stock in CoreWeave, consider this:
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Prediction: These Stocks Will Collapse If the AI Bubble Pops in 2026 was originally published by The Motley Fool
Small restaurant owner Justina John, from Cardiff, says it is “impossible” to compete with the chain restaurants on delivery apps
Independent restaurants have accused global corporations of being “sneaky” and “a killer” to family businesses by masquerading as indies on delivery apps.
Chain restaurants including Pizza Hut, TGI Fridays, Frankie & Benny’s, Las Iguanas and Barburrito have brands on apps such as Deliveroo and Just Eat, giving them different names and the appearance of being small or independent businesses.
Justina John, owner of ONJA Taste of Tanzania in Cardiff, said trying to survive was “like small fish trying to swim with the sharks”.
Peter Backman, CEO of theDelivery.World, said the practice was only misleading if customers were purposely trying to support independent restaurants and takeaways.
Justina, 45, from Cardiff, opened her restaurant about a year ago and said she had noticed an “overwhelming presence of chain restaurants, sometimes masquerading as independents” on delivery apps.
“Very sneaky, it’s not fair on the small businesses,” she added.
“The only thing that’s keeping us alive is authenticity, there’s certain things you can’t fake.”
Justina described the chain restaurants as being “very sneaky”
Justina wants delivery platforms to take greater responsibility, to verify listings and help genuine independent businesses by separating them on the apps so customers can easily support them if they choose.
Just Eat, Deliveroo and Uber Eats all said virtual brands could be utilised by any business, including independents.
Just Eat said it supported independent businesses to reach new customers and virtual brands gave partners “the opportunity to expand their food offerings and diversify their revenue streams”.
It added that it was transparent with customers as they could see the address of where they were ordering from, “to help them make informed choices”.
Deliveroo said its “core mission is to champion local businesses” and that virtual brands allowed restaurants to “leverage existing kitchen facilities and capacity to create a delivery-only brand, giving them the opportunity to reach new customers and drive additional revenue in an increasingly digital world”.
Uber Eats said it was committed to “levelling the playing field” for the merchants on its platform, adding: “We have a growing team of dedicated account managers working to build bespoke solutions and equal exposure opportunities on the app and we accelerate rather than compete with our partners’ sales.”
Fowl and Fury
Jamie Rees says he is worried for the future of the city if independents cannot survive
Jamie Rees, 36, is co-owner of Cardiff’s Fowl and Fury and said he first noticed chains creating digital brands three years ago, but now it is “literally everywhere”.
He singled out Frankie & Benny’s as “the worst offender, recently,” with TGI Fridays being “quite a big one”.
Logging on to Deliveroo while in Cardiff, the BBC checked some of these takeaways by pressing the “allergens and info” option, which gives you the registered address of the company providing your food.
Bird Box and Stacks were from Frankie & Benny’s, Mother Clucker was TGI Fridays, Wing Street was Pizza Hut, Hot Chick was Coyote Ugly and Badass Burritos was Barburrito.
Jamie understood why companies do it and that you cannot stop it, but was frustrated because he said apps – in theory – created a more equal playing field.
“But then when they bring out five different restaurants under the same roof, now I’m not equal,” he added.
“They have more money for advertising, promos, photographers.”
He wants to see legislation about transparency around what kitchen people’s food comes from and the parent company behind it.
“What I fear is eventually the smaller guys are going to go out of business because they’re a lot less visible on these platforms.
“It feels a little bit unethical, because nine times out of 10 the people that are ordering from these ghost kitchens are doing it because of the branding.”
For Fowl and Fury, this is a very real problem, he said, because most consumers order online.
Fowl and Fury
Fowl and Fury began in Jamie and his wife Natalie’s garden
Friends suggested creating an independent-only delivery service, but he said it could not compete with Uber Eats, Just Eat and Deliveroo.
Rajendra Vikram Kupperi, 45, director of Vivo Amigo, which opened in Cardiff in 2020, said ghost kitchens were diluting the takeaway industry and were unfair to independent businesses.
“During Covid, the number of ghost kitchens that opened was endless. It’s a killer,” he said.
“The bigger brands can undercut the prices, they can have good offers.”
Rajendra Vikram Kupperi
Rajendra Vikram Kupperi says ghost kitchens on delivery apps are “a killer”
Vivo Amigo uses Deliveroo, Uber Eats and Just Eat but Rajendra feels his business has been directly affected by the practice of using ghost kitchens.
Mexican food brands have sub-brands online. For example, Kick-Ass Burrito is from Las Iguanas and Barburrito serves on Deliveroo as itself, but also as Death Valley Burrito, Badass Burritos and Twisted Health Kitchen.
He said he would like ghost kitchens and big brands separated from independent restaurants so consumers are not mislead.
“That would encourage customers who want to support independent brands, but at the moment it’s all mixed up,” he said.
“Customers can’t really differentiate.”
At first glimpse, many of these ghost kitchens look like independent restaurants – only if you scroll down to the address can you tell where your food is made
Barburrito said virtual brands were “one way restaurants can make better use of existing kitchens, reduce waste and respond to customer demand”.
In a statement, it said the model “is not exclusive to large chains and many independent operators are equally able to create virtual brands on delivery platforms”.
Coyote Ugly said: “The problem isn’t competition, but whether businesses can remain viable at all.
“Ultimately, this is about keeping doors open, protecting jobs and giving hospitality a fighting chance to thrive.”
Peter Backman of theDelivery.World said big chain restaurants created ghost restaurants “for extra revenue, they’ve got the capacity – why not?”
He said he was unsure if customers cared, but if they “really believe they’re supporting their local business, it’s deceiving”.
“But if the consumer is just saying, ‘oh, I want some wings’, what the hell does it matter?”
He said he always favoured transparency and thought delivery apps having a page for independent businesses was a good idea, but questioned the practicality.
Frankie & Benny’s, TGI Fridays, Pizza Hut and Las Iguanas have been asked to comment.
The projected fair value for Phoenix Mecano is CHF769 based on 2 Stage Free Cash Flow to Equity
Phoenix Mecano is estimated to be 44% undervalued based on current share price of CHF434
Our fair value estimate is 56% higher than Phoenix Mecano’s analyst price target of €493
In this article we are going to estimate the intrinsic value of Phoenix Mecano AG (VTX:PMN) by taking the expected future cash flows and discounting them to their present value. The Discounted Cash Flow (DCF) model is the tool we will apply to do this. Before you think you won’t be able to understand it, just read on! It’s actually much less complex than you’d imagine.
Remember though, that there are many ways to estimate a company’s value, and a DCF is just one method. If you want to learn more about discounted cash flow, the rationale behind this calculation can be read in detail in the Simply Wall St analysis model.
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We use what is known as a 2-stage model, which simply means we have two different periods of growth rates for the company’s cash flows. Generally the first stage is higher growth, and the second stage is a lower growth phase. In the first stage we need to estimate the cash flows to the business over the next ten years. Where possible we use analyst estimates, but when these aren’t available we extrapolate the previous free cash flow (FCF) from the last estimate or reported value. We assume companies with shrinking free cash flow will slow their rate of shrinkage, and that companies with growing free cash flow will see their growth rate slow, over this period. We do this to reflect that growth tends to slow more in the early years than it does in later years.
Generally we assume that a dollar today is more valuable than a dollar in the future, so we discount the value of these future cash flows to their estimated value in today’s dollars:
2026
2027
2028
2029
2030
2031
2032
2033
2034
2035
Levered FCF (€, Millions)
€28.3m
€23.8m
€35.8m
€48.5m
€51.2m
€53.1m
€54.5m
€55.6m
€56.5m
€57.2m
Growth Rate Estimate Source
Analyst x2
Analyst x1
Analyst x1
Analyst x1
Analyst x1
Est @ 3.64%
Est @ 2.69%
Est @ 2.03%
Est @ 1.57%
Est @ 1.25%
Present Value (€, Millions) Discounted @ 7.0%
€26.4
€20.8
€29.3
€37.0
€36.6
€35.4
€34.0
€32.4
€30.8
€29.2
(“Est” = FCF growth rate estimated by Simply Wall St) Present Value of 10-year Cash Flow (PVCF) = €312m
The second stage is also known as Terminal Value, this is the business’s cash flow after the first stage. For a number of reasons a very conservative growth rate is used that cannot exceed that of a country’s GDP growth. In this case we have used the 5-year average of the 10-year government bond yield (0.5%) to estimate future growth. In the same way as with the 10-year ‘growth’ period, we discount future cash flows to today’s value, using a cost of equity of 7.0%.
Present Value of Terminal Value (PVTV)= TV / (1 + r)10= €887m÷ ( 1 + 7.0%)10= €452m
The total value, or equity value, is then the sum of the present value of the future cash flows, which in this case is €764m. The last step is to then divide the equity value by the number of shares outstanding. Relative to the current share price of CHF434, the company appears quite good value at a 44% discount to where the stock price trades currently. Remember though, that this is just an approximate valuation, and like any complex formula – garbage in, garbage out.
SWX:PMN Discounted Cash Flow January 18th 2026
We would point out that the most important inputs to a discounted cash flow are the discount rate and of course the actual cash flows. If you don’t agree with these result, have a go at the calculation yourself and play with the assumptions. The DCF also does not consider the possible cyclicality of an industry, or a company’s future capital requirements, so it does not give a full picture of a company’s potential performance. Given that we are looking at Phoenix Mecano as potential shareholders, the cost of equity is used as the discount rate, rather than the cost of capital (or weighted average cost of capital, WACC) which accounts for debt. In this calculation we’ve used 7.0%, which is based on a levered beta of 1.538. Beta is a measure of a stock’s volatility, compared to the market as a whole. We get our beta from the industry average beta of globally comparable companies, with an imposed limit between 0.8 and 2.0, which is a reasonable range for a stable business.
See our latest analysis for Phoenix Mecano
Strength
Weakness
Opportunity
Threat
Valuation is only one side of the coin in terms of building your investment thesis, and it shouldn’t be the only metric you look at when researching a company. It’s not possible to obtain a foolproof valuation with a DCF model. Instead the best use for a DCF model is to test certain assumptions and theories to see if they would lead to the company being undervalued or overvalued. If a company grows at a different rate, or if its cost of equity or risk free rate changes sharply, the output can look very different. Can we work out why the company is trading at a discount to intrinsic value? For Phoenix Mecano, we’ve put together three essential items you should look at:
Risks: As an example, we’ve found 1 warning sign for Phoenix Mecano that you need to consider before investing here.
Future Earnings: How does PMN’s growth rate compare to its peers and the wider market? Dig deeper into the analyst consensus number for the upcoming years by interacting with our free analyst growth expectation chart.
Other High Quality Alternatives: Do you like a good all-rounder? Explore our interactive list of high quality stocks to get an idea of what else is out there you may be missing!
PS. The Simply Wall St app conducts a discounted cash flow valuation for every stock on the SWX every day. If you want to find the calculation for other stocks just search here.
Have feedback on this article? Concerned about the content?Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
You are battling the January blues and see a cheap deal on one of your socials for a two-week break in Spain during August. Better still, the price is £200 cheaper than elsewhere, possibly because the holiday is almost sold out.
When you text to confirm the details after making the payment, you are talked through the booking by a convincing contact.
Unfortunately, that will be the last you hear from the travel agent as they are criminals, and the advertisement was a fake set up to lure you in.
January is one of three months during the year – June and July being the others – when scammers ramp up their efforts to defraud people planning summer and winter breaks. This time of year is traditionally when holiday companies see a rush of bookings as people crave something to look forward to after Christmas.
Jim Winters, head of economic crime at Nationwide, says the building society sees a pick up in holiday scams at this time of year. Typically, people are drawn in by a social media ad, which is either a direct copy of a legitimate one from a reputable company, or created by AI.
“They’ll look at where the popular holiday destinations are, and if there’s one that is up and coming they’ll tailor the scam,” he says.
Nationwide said the average loss to people is about £3,500.
What it looks like
The hook is a credible-looking ad on social media for two weeks in the sun, or a winter break skiing. The reason it looks like the real thing is that it has probably been copied from a genuine travel site, however the price quoted will be significantly less than you might expect to pay.
Too good to be true holidays deals are just that. Most often they will take your hard-earned cash and leave you high and dry. Photograph: peangdao/Getty Images/iStockphoto
After clicking on the ad, you will be asked to fill in your details and then be contacted on a chat app, such as WhatsApp, later. Or you may be able to click through directly to the chat from the ad.
Winters explains: “The offer will look like a bargain, an incredibly good value holiday. They might even give you some time pressure – as in ‘this is a one-time only deal’ or ‘you’ve got to sign up to it in the next 24 hours to qualify for this price’, and ‘we’ve only got x amount of tickets at this amount’.”
The fraudsters will ask for payment through bank transfer, and then, typically, cease contact, although some will still answer inquiries to lend some sort of legitimacy to the fraud. But, ultimately, the holiday does not exist.
What to do
When booking a holiday, make sure that you start the process on a reputable website, and not via a chat app. A good tip is to check the URL of the site in your browser. Be aware of the tactics of criminals. Urgency, and the fear of missing out on a deal, are big ploys to make victims act quickly and without thinking through decisions.
“Fraudsters know when peak periods are,” says Winters. “They know when people will be shopping for holidays. And, crucially, they know when they’ll be vulnerable to ‘too good to be true’ offers.”
Being asked to pay via bank transfer is a significant red flag as you will not have the section 75 protections that come with using a credit card.
If you think you have been defrauded, contact your bank immediately. After that, contact Action Fraud, the central hub for fraud and online crime.
Your guide to what Trump’s second term means for Washington, business and the world
European institutions are increasingly pushing into private markets to help mitigate “a new regime of higher volatility”, BlackRock has said, as it rapidly expands its own activity in the sector.
Dominik Rohé, deputy head of international business at the world’s largest fund manager, said clients in Europe, the Middle East and Africa accounted for about 35 per cent of its private asset fundraising last year.
The amount raised from institutions in this region increased by more than 50 per cent in absolute terms from 2024, in a sign of the fast-growing adoption of private assets in this market.
Rohé said institutions in Europe such as pension funds have been shifting away from public equities and bonds towards private assets, partly to manage market turbulence and to find investments whose returns were not correlated with movements in stock or bond markets.
“European institutions are allocating more to private markets as they recognise that we are in a new regime with higher volatility and different correlations between bonds and equities,” he told the FT.
BlackRock’s Dominik Rohé said private markets ‘can be more opaque to evaluate’ and warned investors to be mindful
BlackRock has bought three firms — infrastructure investment group Global Infrastructure Partners, private investment firm HPS Investment Partners and data provider Preqin — to fuel its expansion in the sector over the past two years. It is targeting $400bn in private market fundraising by 2030.
The private markets sector has grown rapidly as investors have been attracted to an asset class that is viewed as less volatile because it is priced less frequently than public markets. But private markets can be more opaque and the less frequent valuation process can pose a risk for investors.
Geopolitical tensions and policy uncertainty pushed up volatility last year, including a sharp sell-off in equity markets in the wake of US President Donald Trump’s “liberation day” tariffs, even as equities reached all-time highs.
Institutions “also see the opportunity to achieve early and diversified access through private markets into areas that are driving the economy, such as the infrastructure that will support the growth of AI as well as cash flowing businesses that have chosen to stay private for longer”, Rohé said.
BlackRock this week reported strong inflows into its fast-growing private markets unit, with the private credit business attracting $7.2bn and its infrastructure investment unit drawing in close to $5bn in three months.
BlackRock has amassed $322.6bn of assets under management in private markets. Total assets under management climbed to a record of $14tn, driven by its equity and fixed-income business.
Rohé said that private markets “can be more opaque to evaluate” and warned investors to be mindful of some of the liquidity challenges posed by private assets that can be harder to value and sell.
He added that across the EU and UK, more than 90 per cent of companies with annual revenue of over $100mn are privately held.
Suppliers of parts for Nvidia’s H200 have paused production after Chinese customs officials blocked shipments of the newly approved artificial intelligence processors from entering China, according to a report.
Reuters could not immediately verify the report, which appeared in the Financial Times citing two people with knowledge of the matter. Nvidia did not immediately respond to a Reuters request for comment made outside regular business hours.
Nvidia had expected more than one million orders from Chinese clients, the report said, adding that its suppliers had been operating around the clock to prepare for shipping as early as March.
Chinese customs authorities this week told customs agents that Nvidia’s H200 chips were not permitted to enter the country, Reuters reported.
Sources have also said government officials summoned domestic tech firms to warn them against buying the chips unless it was necessary.
The sources, who spoke on condition of anonymity due to the sensitivity of the matter, said authorities had not provided any reasons for their directives and had not given any indication if this was a formal ban or a temporary measure.
The H200, Nvidia’s second most powerful AI chip, is one of the biggest flashpoints in US-Sino relations. There is strong demand from Chinese firms, but it remains unclear if Beijing wants to ban the chips outright to encourage domestic chip companies to develop their own; whether the Chinese government is still mulling restrictions; or if it is all a bargaining tactic.
If the import ban is confirmed, it adds to a convoluted situation that includes the Trump administration allowing the US-designed, Taiwanese-manufactured H200 chips to be exported to China, with the US government reportedly to take a share of the profits.
The US government then decreed that instead of the completed chips being sent directly to China from Taiwan, they instead first go to a US laboratory for testing, allowing a 25% tariff to be imposed as they pass through the US. The tariff was also applied to chipmaker AMD’s MI325X processor.
Experts and analysts are split on whether selling the H200 to China is strategically a good idea. Those in favour say its availability might slow China’s progress developing similar chips and keep Chinese companies dependent on US technology; those against say the H200 is, for example, powerful enough to be used in weapons systems that China’s military might one day deploy against the US or its allies.
Using the 2 Stage Free Cash Flow to Equity, AirAsia X Berhad fair value estimate is RM1.64
With RM1.67 share price, AirAsia X Berhad appears to be trading close to its estimated fair value
Industry average of 58% suggests AirAsia X Berhad’s peers are currently trading at a higher premium to fair value
Does the January share price for AirAsia X Berhad (KLSE:AAX) reflect what it’s really worth? Today, we will estimate the stock’s intrinsic value by taking the forecast future cash flows of the company and discounting them back to today’s value. We will use the Discounted Cash Flow (DCF) model on this occasion. Before you think you won’t be able to understand it, just read on! It’s actually much less complex than you’d imagine.
Remember though, that there are many ways to estimate a company’s value, and a DCF is just one method. For those who are keen learners of equity analysis, the Simply Wall St analysis model here may be something of interest to you.
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We use what is known as a 2-stage model, which simply means we have two different periods of growth rates for the company’s cash flows. Generally the first stage is higher growth, and the second stage is a lower growth phase. To start off with, we need to estimate the next ten years of cash flows. Where possible we use analyst estimates, but when these aren’t available we extrapolate the previous free cash flow (FCF) from the last estimate or reported value. We assume companies with shrinking free cash flow will slow their rate of shrinkage, and that companies with growing free cash flow will see their growth rate slow, over this period. We do this to reflect that growth tends to slow more in the early years than it does in later years.
Generally we assume that a dollar today is more valuable than a dollar in the future, so we need to discount the sum of these future cash flows to arrive at a present value estimate:
2026
2027
2028
2029
2030
2031
2032
2033
2034
2035
Levered FCF (MYR, Millions)
RM464.8m
RM444.8m
RM437.1m
RM436.7m
RM441.3m
RM449.5m
RM460.3m
RM473.2m
RM487.7m
RM503.6m
Growth Rate Estimate Source
Analyst x1
Analyst x1
Est @ -1.72%
Est @ -0.09%
Est @ 1.05%
Est @ 1.85%
Est @ 2.41%
Est @ 2.80%
Est @ 3.07%
Est @ 3.26%
Present Value (MYR, Millions) Discounted @ 11%
RM420
RM364
RM323
RM292
RM267
RM246
RM228
RM212
RM197
RM184
(“Est” = FCF growth rate estimated by Simply Wall St) Present Value of 10-year Cash Flow (PVCF) = RM2.7b
We now need to calculate the Terminal Value, which accounts for all the future cash flows after this ten year period. For a number of reasons a very conservative growth rate is used that cannot exceed that of a country’s GDP growth. In this case we have used the 5-year average of the 10-year government bond yield (3.7%) to estimate future growth. In the same way as with the 10-year ‘growth’ period, we discount future cash flows to today’s value, using a cost of equity of 11%.
Present Value of Terminal Value (PVTV)= TV / (1 + r)10= RM7.6b÷ ( 1 + 11%)10= RM2.8b
The total value, or equity value, is then the sum of the present value of the future cash flows, which in this case is RM5.5b. The last step is to then divide the equity value by the number of shares outstanding. Relative to the current share price of RM1.7, the company appears around fair value at the time of writing. The assumptions in any calculation have a big impact on the valuation, so it is better to view this as a rough estimate, not precise down to the last cent.
KLSE:AAX Discounted Cash Flow January 18th 2026
Now the most important inputs to a discounted cash flow are the discount rate, and of course, the actual cash flows. Part of investing is coming up with your own evaluation of a company’s future performance, so try the calculation yourself and check your own assumptions. The DCF also does not consider the possible cyclicality of an industry, or a company’s future capital requirements, so it does not give a full picture of a company’s potential performance. Given that we are looking at AirAsia X Berhad as potential shareholders, the cost of equity is used as the discount rate, rather than the cost of capital (or weighted average cost of capital, WACC) which accounts for debt. In this calculation we’ve used 11%, which is based on a levered beta of 1.150. Beta is a measure of a stock’s volatility, compared to the market as a whole. We get our beta from the industry average beta of globally comparable companies, with an imposed limit between 0.8 and 2.0, which is a reasonable range for a stable business.
See our latest analysis for AirAsia X Berhad
Strength
Weakness
Opportunity
Threat
Although the valuation of a company is important, it is only one of many factors that you need to assess for a company. It’s not possible to obtain a foolproof valuation with a DCF model. Instead the best use for a DCF model is to test certain assumptions and theories to see if they would lead to the company being undervalued or overvalued. For example, changes in the company’s cost of equity or the risk free rate can significantly impact the valuation. For AirAsia X Berhad, we’ve put together three relevant elements you should look at:
Risks: For example, we’ve discovered 2 warning signs for AirAsia X Berhad (1 is significant!) that you should be aware of before investing here.
Future Earnings: How does AAX’s growth rate compare to its peers and the wider market? Dig deeper into the analyst consensus number for the upcoming years by interacting with our free analyst growth expectation chart.
Other Solid Businesses: Low debt, high returns on equity and good past performance are fundamental to a strong business. Why not explore our interactive list of stocks with solid business fundamentals to see if there are other companies you may not have considered!
PS. Simply Wall St updates its DCF calculation for every Malaysian stock every day, so if you want to find the intrinsic value of any other stock just search here.
Have feedback on this article? Concerned about the content?Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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If you are wondering whether Compass Minerals International’s recent share price makes sense, you are not alone. This article is here to help you size up what that price might be offering you.
The stock last closed at US$23.29, with returns of 2.5% over 7 days, 22.9% over 30 days, 17.3% year to date, 63.9% over 1 year, compared with declines of 47.0% over 3 years and 59.7% over 5 years.
Recent coverage has focused on how the share price and long term return profile compare with the company’s fundamentals and peers. This helps frame whether the current level lines up with its underlying business. This context is useful as we assess whether the recent rebound sits on solid footing or still leaves questions about longer term value.
Compass Minerals International currently has a valuation score of 2 out of 6, based on how many of our checks suggest the stock looks undervalued. We will look at what different valuation methods say about that score and finish by considering a more complete way to think about value beyond the headline metrics.
Compass Minerals International scores just 2/6 on our valuation checks. See what other red flags we found in the full valuation breakdown.
A Discounted Cash Flow, or DCF, model estimates what a company might be worth today by projecting its future cash flows and then discounting those back to a present value.
For Compass Minerals International, the model uses a 2 Stage Free Cash Flow to Equity approach based on cash flow projections. The company’s last twelve month free cash flow is about $79.7 million. Analysts provide estimates for the next few years, and Simply Wall St then extends those to a 10 year view. Within those projections, free cash flow for 2026 is set at $55.5 million and for 2027 at $47.7 million, with further years extrapolated, reaching $42.1 million by 2035 on a discounted basis of $15.6 million.
Combining all projected and discounted cash flows, the model arrives at an estimated intrinsic value of about $11.78 per share. Compared with the recent share price of US$23.29, this implies the stock is 97.7% overvalued according to this specific DCF framework.
Result: OVERVALUED
Our Discounted Cash Flow (DCF) analysis suggests Compass Minerals International may be overvalued by 97.7%. Discover 871 undervalued stocks or create your own screener to find better value opportunities.
CMP Discounted Cash Flow as at Jan 2026
Head to the Valuation section of our Company Report for more details on how we arrive at this Fair Value for Compass Minerals International.
For companies where sales are a more stable reference point than earnings, the P/S ratio can be a useful way to think about what you are paying for each dollar of revenue.
What counts as a reasonable P/S multiple usually reflects how the market views a company’s growth potential and risk profile. Higher expected growth and lower perceived risk tend to support higher multiples, while slower expected growth or higher risk often line up with lower ones.
Compass Minerals International currently trades on a P/S of 0.78x. That sits well below the Metals and Mining industry average P/S of 3.16x and also below the peer average of 9.84x that Simply Wall St tracks for this group. On headline comparisons alone, the stock screens as cheaper than both its sector and similar companies on a sales basis.
Simply Wall St’s Fair Ratio takes this a step further. It estimates what a more tailored P/S might look like, based on factors such as earnings growth, industry, profit margins, market cap and company specific risks. Because it adjusts for these elements, it can be more informative than raw peer or industry comparisons.
For Compass Minerals International, the Fair Ratio is 0.61x versus the current 0.78x. That gap points to the shares looking overvalued relative to this customised benchmark.
Result: OVERVALUED
NYSE:CMP P/S Ratio as at Jan 2026
P/S ratios tell one story, but what if the real opportunity lies elsewhere? Discover 1442 companies where insiders are betting big on explosive growth.
Earlier we mentioned that there is an even better way to understand valuation. Let us introduce you to Narratives, which are simply your story about Compass Minerals International. A Narrative links your assumptions for future revenue, earnings, margins and fair value to a clear financial forecast that you can compare with today’s share price. All of this is available within an easy tool on Simply Wall St’s Community page that updates automatically when new earnings or news arrive. This allows you to see in real time whether your Fair Value suggests the shares look more attractive or less attractive than the current US$23.29 price. You can also see how other investors frame the same stock. For example, some may build a Narrative around the US$20.75 fair value and modest revenue growth and margin assumptions, while others use more cautious or more optimistic inputs, giving you a range of perspectives to weigh against your own view.
Do you think there’s more to the story for Compass Minerals International? Head over to our Community to see what others are saying!
NYSE:CMP 1-Year Stock Price Chart
This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
Companies discussed in this article include CMP.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com
