What is ALTBG.PA's Intrinsic value?

Blockchain Group SA (ALTBG.PA) Intrinsic Value Analysis

Executive Summary

As of June 5, 2025, Blockchain Group SA's estimated intrinsic value ranges from $0.05 to $2.46 per share, depending on the valuation methodology applied.

Valuation Method Fair Value (USD) Implied Upside/Downside
Dividend Discount Model (Multi-Stage) $0.05 -98.5%
Dividend Discount Model (Stable) $2.46 -28.9%

Is Blockchain Group SA (ALTBG.PA) undervalued or overvalued?

With the current market price at $3.46, the stock appears to be significantly 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 Blockchain Group SA'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 3.0% 3.5%
Equity market risk premium 5.8% 6.8%
Adjusted beta 0.31 0.35
Cost of equity 4.8% 6.4%
Cost of debt 5.0% 5.0%
Tax rate 16.5% 44.8%
Debt/Equity ratio 0.01 0.01
After-tax WACC 4.8% 6.4%

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: 5.6%
  • Long-term growth rate: 3.8%
  • Fair value: $0.05 (-98.5% from current price)

Stable DDM:

  • Stable payout ratio: 70% (Low) to 90% (High)
  • Cost of equity: 6.4% (Low) to 4.8% (High)
  • Long-term growth rate: 3.0% (Low) to 4.6% (High)
  • Fair value range: $0 to $5
  • Selected fair value: $2.46 (-28.9% from current price)

Key Financial Metrics

Metric Value
Market Capitalization $354M
Enterprise Value $356M
Trailing P/E 260.70
Forward P/E 260.70
Trailing EV/EBITDA 3.15
Current Dividend Yield 0.00%
Dividend Growth Rate (5Y) 0.00%
Debt-to-Equity Ratio 0.01

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 (Multi-Stage) 57% $0.01
Dividend Discount Model (Stable) 43% $0.37
Weighted Average 100% $1.08

Investment Conclusion

Based on our comprehensive valuation analysis, Blockchain Group SA's weighted average intrinsic value is $1.08, which is approximately 68.7% below the current market price of $3.46.

Key investment considerations:

  • Strong projected earnings growth (10% to 3% margin)
  • Consistent cash flow generation
  • Conservative capital structure (Debt/Equity of 0.01)

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