What is ADXN.SW's Intrinsic value?

Addex Therapeutics Ltd (ADXN.SW) Intrinsic Value Analysis

Executive Summary

As of May 23, 2025, Addex Therapeutics Ltd's estimated intrinsic value ranges from $7.52 to $7.52 per share, depending on the valuation methodology applied.

Valuation Method Fair Value (USD) Implied Upside/Downside
Dividend Discount Model (Stable) $7.52 +13087.0%

Is Addex Therapeutics Ltd (ADXN.SW) undervalued or overvalued?

With the current market price at $0.06, the stock appears to be significantly undervalued.

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 Addex Therapeutics Ltd's intrinsic value, including:

  1. Dividend Discount Model (DDM): Values the company based on expected future dividend payments

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 1.0% 1.5%
Equity market risk premium 5.1% 6.1%
Adjusted beta 0.37 0.4
Cost of equity 4.4% 5.9%
Cost of debt 7.0% 7.0%
Tax rate 16.8% 18.0%
Debt/Equity ratio 0.05 0.05
After-tax WACC 4.4% 5.9%

Valuation Methods

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: 0.0%
  • Stable payout ratio: 90.0%
  • Growth transition: 5 years
  • Cost of equity: 5.1%
  • Long-term growth rate: 3.6%
  • Fair value: $-1.76 (-3190.9% from current price)

Stable DDM:

  • Stable payout ratio: 70% (Low) to 90% (High)
  • Cost of equity: 5.9% (Low) to 4.4% (High)
  • Long-term growth rate: 3.0% (Low) to 4.2% (High)
  • Fair value range: $1 to $14
  • Selected fair value: $7.52 (13087.0% from current price)

Key Financial Metrics

Metric Value
Market Capitalization $11M
Enterprise Value $7M
Trailing P/E 1.94
Forward P/E 1.94
Trailing EV/EBITDA 8.25
Current Dividend Yield 62.96%
Dividend Growth Rate (5Y) 0.00%
Debt-to-Equity Ratio 0.05

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
Dividend Discount Model (Stable) 100% $1.13
Weighted Average 100% $7.52

Investment Conclusion

Based on our comprehensive valuation analysis, Addex Therapeutics Ltd's weighted average intrinsic value is $7.52, which is approximately 13087.0% above the current market price of $0.06.

Key investment considerations:

  • Strong projected earnings growth (-641% to -526% margin)
  • Consistent cash flow generation
  • Conservative capital structure (Debt/Equity of 0.05)

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