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IHS Holding Limited (IHS) Intrinsic Value

DCF-based fair value calculation with Bear, Base, and Bull scenarios

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IHS Holding Limited (IHS)

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Intrinsic Value (DCF)

Current$7.42
→
Intrinsic$38.86
+424%
$23.28$38.86$68.44
Market implies 1% growth for 5 years
DCF analysis suggests IHS could have 424% upside at 25% growth — verify assumptions match your view.
At $7, the market prices in only 1% growth — below historical 25%, suggesting low expectations.
Range: Bear $23 → Bull $68. Current price implies expectations below the bear case — very conservative expectations.
Discount ↓Growth →21%23%25%27%
8%$50$55$60$66
10%$32$35$39$43
12%$22$25$27$30
14%$16$18$20$22

Bull Case

  • Bull case ($68) offers 822% upside at 30% growth, 9% discount
  • Price below even worst-case scenario — strong margin of safety
  • Market-implied growth (1%) ≤ historical CAGR (25%)

Bear Case

  • Bear case ($23) with 20% growth, 12% discount rate
  • Using 25% growth — aggressive, watch for mean reversion
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5-Year Free Cash Flow Projection

Year 1$575.37M
Year 2$719.21M
Year 3$899.01M
Year 4$1.12B
Year 5$1.40B
Terminal$20.67B

📐 Model Inputs

Growth Rate25.0%5Y CAGR (cascade: 5Y→3Y→TTM)
Discount Rate10.0%WACC estimate
Terminal Growth3.0%Perpetuity rate
Base Free Cash Flow$460.29MTTM actual
Bear g×0.8, r+2%
Base Historical CAGR
Bull g×1.2, r−1.5%
ℹ️

DCF estimates based on historical growth rates extrapolated forward. Regulated returns may affect assumptions. See FAQ below for full methodology.

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Frequently Asked Questions

Is IHS stock undervalued or overvalued?
🟢 UNDERVALUED

IHS trades at $7.42 vs. our DCF-derived intrinsic value of $30.48, implying +300% upside. At a 10.0% WACC and 25.0% projected FCF growth, the market appears to be underpricing the present value of IHS's future cash flows. The bear case ($16.56) still suggests upside, providing margin of safety.

What is IHS's intrinsic value?

Using a 5-year DCF model: Base FCF of $460M, projected at 25.0% 5Y CAGR (best of revenue, EPS, or FCF growth), discounted at 10.0% WACC, with 3.0% terminal growth. Terminal value calculated via Gordon Growth Model: TV = FCF₅ × (1+g) / (WACC−g). After deducting $3.32B net debt and dividing by 0.33B shares: Bear $16.56 | Base $30.48 | Bull $50.98. Current price $7.42 implies +300% to base case.

How is IHS's fair value calculated?

DCF Methodology:

① Project FCF years 1-5 using 25.0% growth derived from 5-year historical CAGR (best of revenue, EPS, or FCF growth, with 8% floor and 25% cap).

② Calculate terminal value at year 5 using perpetuity growth model with g=3.0%.

③ Discount all cash flows to PV using WACC=10.0%.

④ Sum PV of explicit period + PV of terminal value = Enterprise Value ($13.48B).

⑤ Subtract net debt, divide by shares outstanding.

Sensitivity analysis available above—adjust WACC ±2% or growth ±3% to stress-test the valuation. Implied EV/FCF multiple: 29.3x.