What is ALMIL.PA's Intrinsic value?

1000mercis SA (ALMIL.PA) Intrinsic Value Analysis

Executive Summary

As of May 23, 2025, 1000mercis SA's estimated intrinsic value ranges from $17.91 to $74.44 per share, depending on the valuation methodology applied.

Valuation Method Fair Value (USD) Implied Upside/Downside
Discounted Cash Flow (10Y) $36.64 +22.1%
Discounted Cash Flow (5Y) $35.33 +17.8%
Dividend Discount Model (Multi-Stage) $17.91 -40.3%
Dividend Discount Model (Stable) $38.82 +29.4%
Earnings Power Value $74.44 +148.1%

Is 1000mercis SA (ALMIL.PA) undervalued or overvalued?

With the current market price at $30.00, 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 1000mercis 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 0.46 0.52
Cost of equity 5.7% 7.6%
Cost of debt 5.0% 5.0%
Tax rate 5.5% 13.0%
Debt/Equity ratio 0.62 0.62
After-tax WACC 5.3% 6.3%

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: 5.8% (range: 0.0% - 9.3%)

Key Projections:

  • Revenue growth from $73 (FY12-2023) to $96 (FY12-2033)
  • Net profit margin expansion from 4% to 3%
  • Capital expenditures maintained at approximately 3% of revenue
DCF Model Fair Value Enterprise Value % from Terminal Value
5-Year Growth $35 $101M 84.8%
10-Year Growth $37 $104M 70.4%
5-Year EBITDA $11 $48M 67.7%
10-Year EBITDA $17 $59M 47.9%

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: 6.6%
  • Long-term growth rate: 2.0%
  • Fair value: $17.91 (-40.3% from current price)

Stable DDM:

  • Stable payout ratio: 70% (Low) to 90% (High)
  • Cost of equity: 7.6% (Low) to 5.7% (High)
  • Long-term growth rate: 1.0% (Low) to 3.0% (High)
  • Fair value range: $19 to $59
  • Selected fair value: $38.82 (29.4% 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 $11M
Discount Rate (WACC) 6.3% - 5.3%
Enterprise Value $173M - $206M
Net Debt $22M
Equity Value $151M - $184M
Outstanding Shares 2M
Fair Value $67 - $82
Selected Fair Value $74.44

Key Financial Metrics

Metric Value
Market Capitalization $68M
Enterprise Value $89M
Trailing P/E 17.20
Forward P/E 28.99
Trailing EV/EBITDA 5.85
Current Dividend Yield 3151.00%
Dividend Growth Rate (5Y) 130.25%
Debt-to-Equity Ratio 0.62

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% $10.99
Discounted Cash Flow (5Y) 25% $8.83
Dividend Discount Model (Multi-Stage) 20% $3.58
Dividend Discount Model (Stable) 15% $5.82
Earnings Power Value 10% $7.44
Weighted Average 100% $36.67

Investment Conclusion

Based on our comprehensive valuation analysis, 1000mercis SA's weighted average intrinsic value is $36.67, which is approximately 22.2% above the current market price of $30.00.

Key investment considerations:

  • Strong projected earnings growth (4% to 3% margin)
  • Consistent cash flow generation
  • Historical dividend growth of 130.25%

Given these factors, we believe 1000mercis SA is currently significantly undervalued with the potential for long-term appreciation based on the company's growth trajectory and financial strength.