What is ABIO.PA's Intrinsic value?

Albioma SA (ABIO.PA) Intrinsic Value Analysis

Executive Summary

As of June 20, 2025, Albioma SA's estimated intrinsic value ranges from $26.44 to $45.54 per share, depending on the valuation methodology applied.

Valuation Method Fair Value (USD) Implied Upside/Downside
Discounted Cash Flow (10Y) $45.54 -3.4%
Discounted Cash Flow (5Y) $26.44 -43.9%
Dividend Discount Model (Multi-Stage) $44.73 -5.1%
Dividend Discount Model (Stable) $31.81 -32.5%
Earnings Power Value $34.97 -25.8%

Is Albioma SA (ABIO.PA) undervalued or overvalued?

With the current market price at $47.14, the stock appears to be significantly overvalued.

Understanding Intrinsic Value

Intrinsic value represents the "true" worth of a company based on its fundamentals rather than market sentiment. We've employed multiple methodologies to triangulate Albioma SA's intrinsic value, including:

  1. Discounted Cash Flow (DCF): Values the company based on projected future cash flows
  2. Dividend Discount Model (DDM): Values the company based on expected future dividend payments
  3. Earnings Power Value (EPV): Values the company based on its current earnings power, assuming no growth

Weighted Average Cost of Capital (WACC)

The cost of capital is a critical factor in valuation models, representing the required return for investors.

WACC Component Low High
Long-term bond rate 3.0% 3.5%
Equity market risk premium 5.8% 6.8%
Adjusted beta 0.58 0.62
Cost of equity 6.4% 8.2%
Cost of debt 4.7% 10.6%
Tax rate 27.4% 29.5%
Debt/Equity ratio 0.66 0.66
After-tax WACC 5.2% 7.9%

Valuation Methods

1. Discounted Cash Flow (DCF) Valuation

Our DCF model projects cash flows over 5-year and 10-year horizons, with the following key assumptions:

  • Forecast Period: 5-year DCF and 10-year DCF
  • Terminal Growth Rate: 0.0% (range: 3.0% - 5.0%)
  • Discount Rate: 6.6% (range: 0.0% - 9.3%)

Key Projections:

  • Revenue growth from $573 (FY12-2021) to $946 (FY12-2031)
  • Net profit margin expansion from 12% to 14%
  • Capital expenditures maintained at approximately 31% of revenue
DCF Model Fair Value Enterprise Value % from Terminal Value
5-Year Growth $26 $1,893M 82.1%
10-Year Growth $46 $2,512M 69.6%
5-Year EBITDA $74 $3,430M 90.1%
10-Year EBITDA $87 $3,852M 80.2%

2. Dividend Discount Model (DDM)

The DDM values a company based on its expected future dividend payments. We used two approaches:

Multi-Stage DDM:

  • Current payout ratio: 80.4%
  • Stable payout ratio: 90.0%
  • Growth transition: 5 years
  • Cost of equity: 7.3%
  • Long-term growth rate: 2.0%
  • Fair value: $44.73 (-5.1% from current price)

Stable DDM:

  • Stable payout ratio: 70% (Low) to 90% (High)
  • Cost of equity: 8.2% (Low) to 6.4% (High)
  • Long-term growth rate: 1.0% (Low) to 3.0% (High)
  • Fair value range: $17 to $47
  • Selected fair value: $31.81 (-32.5% from current price)

3. Earnings Power Value (EPV)

EPV assesses a company's value based on its current normalized earnings power, assuming no growth.

EPV Component Value
Normalized Earnings $136M
Discount Rate (WACC) 7.9% - 5.2%
Enterprise Value $1,722M - $2,617M
Net Debt $1,036M
Equity Value $686M - $1,581M
Outstanding Shares 32M
Fair Value $21 - $49
Selected Fair Value $34.97

Key Financial Metrics

Metric Value
Market Capitalization $1528M
Enterprise Value $2564M
Trailing P/E 26.84
Forward P/E 21.92
Trailing EV/EBITDA 11.60
Current Dividend Yield 299.68%
Dividend Growth Rate (5Y) 14.94%
Debt-to-Equity Ratio 0.66

Investment Decision Framework

To determine the most reliable intrinsic value estimate, we weigh each valuation method based on:

  1. Forecast Certainty: DCF methods rely on long-term projections, while earnings power value focuses on current normalized earnings
  2. Business Model Alignment: Dividend models are more appropriate for mature companies with established dividend policies
  3. Historical Accuracy: How well each method has predicted fair value historically

Valuation Weight Matrix

Valuation Method Weight Weighted Value
Discounted Cash Flow (10Y) 30% $13.66
Discounted Cash Flow (5Y) 25% $6.61
Dividend Discount Model (Multi-Stage) 20% $8.95
Dividend Discount Model (Stable) 15% $4.77
Earnings Power Value 10% $3.50
Weighted Average 100% $37.48

Investment Conclusion

Based on our comprehensive valuation analysis, Albioma SA's weighted average intrinsic value is $37.48, which is approximately 20.5% below the current market price of $47.14.

Key investment considerations:

  • Strong projected earnings growth (12% to 14% margin)
  • Consistent cash flow generation
  • Historical dividend growth of 14.94%

Given these factors, we believe Albioma SA is currently significantly overvalued with the potential for long-term appreciation based on the company's growth trajectory and financial strength.