WNS (Holdings) (WNS:NYS) Fundamental Valuation Report



Fundamental Valuation Report

WNS (Holdings)(WNS:NYS)

Industrials:Business Services

This Report was generated using the valuation tools available on StockCalc.com. For a free 30 day trial click here.

Close Price/Date
$54.37 (USD) 20/05/2019

Weighted Valuation
$57.97 (USD)

Overall Rating
Undervalued by 6.6%

Valuation Models Analyst Consensus: $65.50 (USD)
(in order of importance) Discounted Cash Flow: $51.58 (USD)
Comparables: $48.18 (USD)
Valuation Methods This company is:
Cash Flow: Overvalued on a Cash Flow Valuation
Comparable Company: Overvalued on a Comparable Valuation
Asset: Overvalued on an Asset Valuation

Company Overview (WNS:NYS USD)

Price 54.37
Range 54.26 – 55.10
52 week 39.51 – 57.16
Open 54.50
Vol / Avg. 74681/111745
Mkt cap 2.73B
P/E 27.03
Div/yield 0.00/0.00
EPS 2.02
Shares 50.05M
Beta 1.10

Company Description

WNS (Holdings) Ltd is a global provider of business process management (BPM) services, offering comprehensive data, voice, analytical and business transformation services with a blended onshore, nearshore and offshore delivery model. The company has two reportable segments namely WNS Global BPM and WNS Auto Claims BPM. It generates maximum revenue from WNS Global BPM segment. Geographically, it derives a majority of revenue from the US and also has a presence in the UK, Australia, Europe, South Africa and Rest of the world.

Valuation Details

 We have up to 6 valuation points for each company. Details are at the bottom of the report.

Discounted Cash Flow and Sensitivity Analysis for WNS:NYS

Using a discounted cash flow model we generated an intrinsic value of $51.58 (USD) for WNS:NYS

Sensitivity Analysis

(showing how changes in the input variables impact the DCF calculation)

WNS:NYS Current Values Valuation If Dropped * Valuation If Raised *
Calculated Value: $51.58 1% 5% 1% 5%
WACC (or Ke) 8.88 $62.26 $44.01
Terminal Growth Rate 3.00 $44.78 $61.18
Tax Rate 0.20 $54.98 $48.19
Cash Flow 225,495,027 $48.79 $54.38
Capital Expenditures -7,796,600 $51.50 $51.67
Long Term Debt 0 $51.58 $51.58

* Changes are absolute: ex WACC from 8% to 7%

Comparables Model

Using similar companies and price based ratios we generated a valuation of $48.18 (USD) for WNS:NYS. We also generated a valuation of $42.62 (USD) using other metrics and comparables.
The comparable companies were ExlService Holdings (EXLS:NAS), Ritchie Bros Auctioneers (RBA:TSE), Healthcare Services Group (HCSG:NAS), TTEC Holdings (TTEC:NAS) and ICF International (ICFI:NAS).

Company WNS:NYS End Date Value
Earnings/Share $2.02 (USD)
Book Value/Share $11.04 (USD)
Sales/Share $15.51 (USD)
Cash Flow/Share $2.77 (USD)
EBITDA/Share $3.26 (USD)
Price Based on Comps Adjustment Factor (%)
$70.06 (USD) 34.4
$45.43 (USD) -45.5
$27.98 (USD) -19.1
$58.16 (USD) -26.4
$51.44 (USD) 10.8
WNS:NYS Ratios Used Average Values EXLS:NAS RBA:TSE HCSG:NAS TTEC:NAS ICFI:NAS
28.29 PE Ratio 34.68 43.04 31.21 27.32 47.35 24.49
5.18 PB Ratio 4.12 3.24 4.54 5.69 4.89 2.22
3.69 PS Ratio 1.80 2.26 3.24 1.27 1.12 1.13
20.63 PCF Ratio 21.42 19.06 26.27 31.56 10.05 20.16
18.43 EV to EBITDA 15.77 16.79 16.19 22.39 9.54 13.94

Multiples

Using a multiples approach we generated a valuation of  $47.63 (USD) for WNS:NYS

Company WNS:NYS End Date Value
Earnings/Share $2.02 (USD)
Book Value/Share $11.04 (USD)
Sales/Share $15.51 (USD)
Cash Flow/Share $2.77 (USD)
EBITDA/Share $3.26 (USD)
Price Based on Comps Adjustment Factor
$54.19 (USD) 0
$44.91 (USD) 0
$45.02 (USD) 0
$47.02 (USD) 0
$47.01 (USD) 0
Ratios Ratio Average
PE Ratio 26.83
PB Ratio 4.07
PS Ratio 2.90
PCF Ratio 16.97
EV to EBITDA 14.41

Adjusted Book Value versus Historical Price to Book

The average the Price to Book ratio for  WNS:NYS for the last 10 years was  4.00

We ran the Adjusted Book Value for  WNS:NYS and generated a book value of  $11.04 (USD)
By multiplying these we get an adjusted valuation of  $44.14 (USD)

Analyst Data

In the Stockcalc database there are 2 analysts that provide a valuation for WNS:NYS. The 2 analysts have a concensus valuation for WNS:NYS for 2020 of $65.50 (USD).

WNS:NYS WNS (Holdings)

Analyst Recommendation
Buy Hold Sell Rating
(of 5)
Guidance As Of
3 0 0 5.0000 Buy 2019-5-17

Current Price: 54.37 USD

Analyst Consensus
USD Millions 2020 2021
Mean EPS 2.78 3.12
# EPS Analysts 2 1
Mean Revenue 877.10 960.40
# Revenue Analysts 1 1
Mean Target Price 65.50
Mean Cash Flow
Mean EBITDA
Mean Net Income
Mean Debt Outstanding
Mean Tax Rate 23.00 23.00
Mean Growth Rate 12.00
Mean Capital Expenditure

Explanation of Valuation Models

We have up to 6 valuation points for each company in the database.
The Discounted Cash Flow (DCF) valuation is a cash flow model where cash flow projections are discounted back to the present to calculate value per share. DCF is a common valuation technique especially for companies undergoing irregular cash flows such as resource companies (mining, forestry, oil and gas) going though price cycles or smaller companies about to generate cash flow (junior exploration companies, junior pharma, technology firms…).
The Price Comparables valuation is the result of valuing the company we are looking at on the basis of ratios from selected comparable companies: Price to Earnings, Price to Book, Price to Sales, Price to Cash Flow, Enterprise Value (EV) to EBITDA. Each of these ratios for the selected comparable companies are averaged and multiplied by the values for the company we are interested in to calculate a value per share for our selected company.
We have included the Other Comparables as a way to value companies that cannot be valued using Earnings based ratios. This technique is very useful for companies still experiencing negative cash flows such as mining exploration firms. We use Cash/Share, Book Value/Share, MarketCap, 1 Year Return, NetPPE as the ratios here. Each of these ratios for the selected comparable companies are averaged and multiplied by the values for the company we are interested in to calculate a value per share for our selected company.
Multiples are similar to Price comparables where we look at current or historic ratios for the company in question to assess what it should be worth today based on those historic ratios. We use the same 5 ratios as in the price comparables and value the company with its historic averages.
With Adjusted Book Value (ABV) we calculate the book value per share for the company based on its balance sheet and multiply that book value per share by its historical price to book ratio to calculate a value per share.
If we have Analyst coverage for the company we use the consensus target price here.

Notice to User


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