As of June 8, 2025, Aeorema Communications PLC's estimated intrinsic value ranges from $38.09 to $123.16 per share, depending on the valuation methodology applied.
| Valuation Method | Fair Value (USD) | Implied Upside/Downside |
|---|---|---|
| Discounted Cash Flow (10Y) | $72.80 | +47.1% |
| Discounted Cash Flow (5Y) | $63.03 | +27.3% |
| Dividend Discount Model (Multi-Stage) | $39.57 | -20.1% |
| Dividend Discount Model (Stable) | $38.09 | -23.1% |
| Earnings Power Value | $123.16 | +148.8% |
Is Aeorema Communications PLC (AEO.L) undervalued or overvalued?
With the current market price at $49.50, the stock appears to be significantly undervalued.
Intrinsic value represents the "true" worth of a company based on its fundamentals rather than market sentiment. We've employed multiple methodologies to triangulate Aeorema Communications PLC'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 | 4.0% | 4.5% |
| Equity market risk premium | 6.0% | 7.0% |
| Adjusted beta | 0.42 | 0.57 |
| Cost of equity | 6.5% | 8.9% |
| Cost of debt | 5.0% | 5.0% |
| Tax rate | 18.3% | 25.6% |
| Debt/Equity ratio | 0.13 | 0.13 |
| After-tax WACC | 6.2% | 8.3% |
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 | $63 | $6M | 74.6% |
| 10-Year Growth | $73 | $7M | 56.5% |
| 5-Year EBITDA | $56 | $5M | 71.4% |
| 10-Year EBITDA | $65 | $6M | 50.9% |
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 | $1M |
| Discount Rate (WACC) | 8.3% - 6.2% |
| Enterprise Value | $10M - $14M |
| Net Debt | $(0)M |
| Equity Value | $10M - $14M |
| Outstanding Shares | 0M |
| Fair Value | $106 - $141 |
| Selected Fair Value | $123.16 |
| Metric | Value |
|---|---|
| Market Capitalization | $5M |
| Enterprise Value | $5M |
| Trailing P/E | 15.69 |
| Forward P/E | 13.85 |
| Trailing EV/EBITDA | 6.35 |
| Current Dividend Yield | 596.37% |
| Dividend Growth Rate (5Y) | 33.34% |
| Debt-to-Equity Ratio | 0.13 |
To determine the most reliable intrinsic value estimate, we weigh each valuation method based on:
| Valuation Method | Weight | Weighted Value |
|---|---|---|
| Discounted Cash Flow (10Y) | 30% | $21.84 |
| Discounted Cash Flow (5Y) | 25% | $15.76 |
| Dividend Discount Model (Multi-Stage) | 20% | $7.91 |
| Dividend Discount Model (Stable) | 15% | $5.71 |
| Earnings Power Value | 10% | $12.32 |
| Weighted Average | 100% | $63.54 |
Based on our comprehensive valuation analysis, Aeorema Communications PLC's weighted average intrinsic value is $63.54, which is approximately 28.4% above the current market price of $49.50.
Key investment considerations:
Given these factors, we believe Aeorema Communications PLC is currently significantly undervalued with the potential for long-term appreciation based on the company's growth trajectory and financial strength.