What is ABIO.PA's Intrinsic value?

Albioma SA (ABIO.PA) Intrinsic Value Analysis

Executive Summary

As of May 23, 2025, Albioma SA's estimated intrinsic value ranges from $27.85 to $47.51 per share, depending on the valuation methodology applied.

Valuation Method Fair Value (USD) Implied Upside/Downside
Discounted Cash Flow (10Y) $47.51 +0.8%
Discounted Cash Flow (5Y) $27.85 -40.9%
Dividend Discount Model (Multi-Stage) $46.31 -1.8%
Dividend Discount Model (Stable) $33.66 -28.6%
Earnings Power Value $36.34 -22.9%

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

With the current market price at $47.14, the stock appears to be moderately 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 0.54 0.6
Cost of equity 6.2% 8.1%
Cost of debt 4.7% 10.6%
Tax rate 27.4% 29.5%
Debt/Equity ratio 0.66 0.66
After-tax WACC 5.1% 7.8%

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: 6.5% (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 $28 $1,939M 82.5%
10-Year Growth $48 $2,576M 70.2%
5-Year EBITDA $73 $3,418M 90.1%
10-Year EBITDA $87 $3,859M 80.1%

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: 7.1%
  • Long-term growth rate: 2.0%
  • Fair value: $46.31 (-1.8% from current price)

Stable DDM:

  • Stable payout ratio: 70% (Low) to 90% (High)
  • Cost of equity: 8.1% (Low) to 6.2% (High)
  • Long-term growth rate: 1.0% (Low) to 3.0% (High)
  • Fair value range: $17 to $50
  • Selected fair value: $33.66 (-28.6% 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) 7.8% - 5.1%
Enterprise Value $1,739M - $2,688M
Net Debt $1,036M
Equity Value $703M - $1,653M
Outstanding Shares 32M
Fair Value $22 - $51
Selected Fair Value $36.34

Key Financial Metrics

Metric Value
Market Capitalization $1528M
Enterprise Value $2564M
Trailing P/E 26.84
Forward P/E 21.92
Trailing EV/EBITDA 11.50
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% $14.25
Discounted Cash Flow (5Y) 25% $6.96
Dividend Discount Model (Multi-Stage) 20% $9.26
Dividend Discount Model (Stable) 15% $5.05
Earnings Power Value 10% $3.63
Weighted Average 100% $39.16

Investment Conclusion

Based on our comprehensive valuation analysis, Albioma SA's weighted average intrinsic value is $39.16, which is approximately 16.9% 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 moderately overvalued with the potential for long-term appreciation based on the company's growth trajectory and financial strength.