What is ALTVO.PA's Intrinsic value?

Evolis SA (ALTVO.PA) Intrinsic Value Analysis

Executive Summary

As of December 15, 2025, Evolis SA's estimated intrinsic value ranges from $38.50 to $69.08 per share, depending on the valuation methodology applied.

Valuation Method Fair Value (USD) Implied Upside/Downside
Discounted Cash Flow (10Y) $69.08 +57.9%
Discounted Cash Flow (5Y) $56.52 +29.2%
Dividend Discount Model (Multi-Stage) $53.03 +21.2%
Dividend Discount Model (Stable) $55.92 +27.8%
Earnings Power Value $38.50 -12.0%

Is Evolis SA (ALTVO.PA) undervalued or overvalued?

With the current market price at $43.75, 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 Evolis 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 0.55 0.67
Cost of equity 6.2% 8.6%
Cost of debt 5.0% 5.0%
Tax rate 25.3% 28.8%
Debt/Equity ratio 0.01 0.01
After-tax WACC 6.2% 8.5%

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: 7.4% (range: 0.0% - 9.3%)

Key Projections:

  • Revenue growth from $112 (FY12-2022) to $222 (FY12-2032)
  • Net profit margin expansion from 14% to 13%
  • Capital expenditures maintained at approximately 4% of revenue
DCF Model Fair Value Enterprise Value % from Terminal Value
5-Year Growth $57 $272M 79.2%
10-Year Growth $69 $337M 64.7%
5-Year EBITDA $42 $195M 71.0%
10-Year EBITDA $54 $258M 53.7%

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: 75.4%
  • Stable payout ratio: 90.0%
  • Growth transition: 5 years
  • Cost of equity: 7.4%
  • Long-term growth rate: 2.0%
  • Fair value: $53.03 (21.2% from current price)

Stable DDM:

  • Stable payout ratio: 70% (Low) to 90% (High)
  • Cost of equity: 8.6% (Low) to 6.2% (High)
  • Long-term growth rate: 1.0% (Low) to 3.0% (High)
  • Fair value range: $28 to $84
  • Selected fair value: $55.92 (27.8% 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 $13M
Discount Rate (WACC) 8.5% - 6.2%
Enterprise Value $150M - $206M
Net Debt $(23)M
Equity Value $173M - $229M
Outstanding Shares 5M
Fair Value $33 - $44
Selected Fair Value $38.50

Key Financial Metrics

Metric Value
Market Capitalization $228M
Enterprise Value $205M
Trailing P/E 14.60
Forward P/E 15.04
Trailing EV/EBITDA 6.05
Current Dividend Yield 516.43%
Dividend Growth Rate (5Y) 18.01%
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
Discounted Cash Flow (10Y) 30% $20.72
Discounted Cash Flow (5Y) 25% $14.13
Dividend Discount Model (Multi-Stage) 20% $10.61
Dividend Discount Model (Stable) 15% $8.39
Earnings Power Value 10% $3.85
Weighted Average 100% $57.70

Investment Conclusion

Based on our comprehensive valuation analysis, Evolis SA's intrinsic value is $57.70, which is approximately 31.9% above the current market price of $43.75.

Key investment considerations:

  • Strong projected earnings growth (14% to 13% margin)
  • Consistent cash flow generation
  • Conservative capital structure (Debt/Equity of 0.01)
  • Historical dividend growth of 18.01%

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