As of June 2, 2025, Advanced Emissions Solutions Inc's estimated intrinsic value ranges from $0.08 to $3.52 per share, depending on the valuation methodology applied.
| Valuation Method | Fair Value (USD) | Implied Upside/Downside |
|---|---|---|
| Discounted Cash Flow (10Y) | $3.52 | +4.7% |
| Discounted Cash Flow (5Y) | $0.43 | -87.3% |
| Dividend Discount Model (Multi-Stage) | $2.68 | -20.1% |
| Earnings Power Value | $0.08 | -97.7% |
Is Advanced Emissions Solutions Inc (ADES) undervalued or overvalued?
With the current market price at $3.36, the stock appears to be significantly overvalued.
Intrinsic value represents the "true" worth of a company based on its fundamentals rather than market sentiment. We've employed multiple methodologies to triangulate Advanced Emissions Solutions Inc's intrinsic value, including:
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 | 4.2% | 4.7% |
| Equity market risk premium | 4.6% | 5.6% |
| Adjusted beta | 0.57 | 0.68 |
| Cost of equity | 6.8% | 9.0% |
| Cost of debt | 5.8% | 7.0% |
| Tax rate | 22.5% | 24.2% |
| Debt/Equity ratio | 0.04 | 0.04 |
| After-tax WACC | 6.7% | 8.9% |
Our DCF model projects cash flows over 5-year and 10-year horizons, with the following key assumptions:
| DCF Model | Fair Value | Enterprise Value | % from Terminal Value |
|---|---|---|---|
| 5-Year Growth | $0 | $(17)M | 72.5% |
| 10-Year Growth | $4 | $85M | 90.7% |
| 5-Year EBITDA | $4 | $89M | 105.3% |
| 10-Year EBITDA | $5 | $133M | 94.0% |
The DDM values a company based on its expected future dividend payments. We used two approaches:
EPV assesses a company's value based on its current normalized earnings power, assuming no growth.
| EPV Component | Value |
|---|---|
| Normalized Earnings | $(2)M |
| Discount Rate (WACC) | 8.9% - 6.7% |
| Enterprise Value | $(25)M - $(33)M |
| Net Debt | $(31)M |
| Equity Value | $6M - $(1)M |
| Outstanding Shares | 33M |
| Fair Value | $0 - $(0) |
| Selected Fair Value | $0.08 |
| Metric | Value |
|---|---|
| Market Capitalization | $111M |
| Enterprise Value | $80M |
| Trailing P/E | 0.00 |
| Forward P/E | 0.00 |
| Trailing EV/EBITDA | 10.50 |
| Current Dividend Yield | 0.00% |
| Dividend Growth Rate (5Y) | -77.69% |
| Debt-to-Equity Ratio | 0.04 |
To determine the most reliable intrinsic value estimate, we weigh each valuation method based on:
| Valuation Method | Weight | Weighted Value |
|---|---|---|
| Discounted Cash Flow (10Y) | 35% | $1.06 |
| Discounted Cash Flow (5Y) | 29% | $0.11 |
| Dividend Discount Model (Multi-Stage) | 24% | $0.54 |
| Earnings Power Value | 12% | $0.01 |
| Weighted Average | 100% | $2.01 |
Based on our comprehensive valuation analysis, Advanced Emissions Solutions Inc's weighted average intrinsic value is $2.01, which is approximately 40.3% below the current market price of $3.36.
Key investment considerations:
Given these factors, we believe Advanced Emissions Solutions Inc is currently significantly overvalued with the potential for long-term appreciation based on the company's growth trajectory and financial strength.