What is ALVMG.PA's Intrinsic value?

Visiomed Group SA (ALVMG.PA) Intrinsic Value Analysis

Executive Summary

As of May 24, 2025, Visiomed Group SA's estimated intrinsic value ranges from $0.06 to $0.42 per share, depending on the valuation methodology applied.

Valuation Method Fair Value (USD) Implied Upside/Downside
Discounted Cash Flow (10Y) $0.42 +152.7%
Discounted Cash Flow (5Y) $0.21 +22.6%
Dividend Discount Model (Multi-Stage) $0.12 -28.0%
Dividend Discount Model (Stable) $0.06 -62.4%

Is Visiomed Group SA (ALVMG.PA) undervalued or overvalued?

With the current market price at $0.17, 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 Visiomed Group 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

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 0.67
Cost of equity 5.7% 8.6%
Cost of debt 5.0% 5.0%
Tax rate 2.7% 3.2%
Debt/Equity ratio 0.15 0.15
After-tax WACC 5.6% 8.1%

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: 6.8% (range: 0.0% - 9.3%)

Key Projections:

  • Revenue growth from $14 (FY12-2023) to $89 (FY12-2033)
  • Net profit margin expansion from 7% to 6%
  • Capital expenditures maintained at approximately 12% of revenue
DCF Model Fair Value Enterprise Value % from Terminal Value
5-Year Growth $0 $68M 83.6%
10-Year Growth $0 $135M 74.2%
5-Year EBITDA $0 $128M 91.2%
10-Year EBITDA $1 $201M 82.6%

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: 7.1%
  • Long-term growth rate: 2.0%
  • Fair value: $0.12 (-28.0% from current price)

Stable DDM:

  • Stable payout ratio: 70% (Low) to 90% (High)
  • Cost of equity: 8.6% (Low) to 5.7% (High)
  • Long-term growth rate: 1.0% (Low) to 3.0% (High)
  • Fair value range: $0 to $0
  • Selected fair value: $0.06 (-62.4% from current price)

Key Financial Metrics

Metric Value
Market Capitalization $52M
Enterprise Value $57M
Trailing P/E 57.21
Forward P/E 46.06
Trailing EV/EBITDA 15.95
Current Dividend Yield 0.00%
Dividend Growth Rate (5Y) 0.00%
Debt-to-Equity Ratio 0.15

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) 33% $0.13
Discounted Cash Flow (5Y) 28% $0.05
Dividend Discount Model (Multi-Stage) 22% $0.02
Dividend Discount Model (Stable) 17% $0.01
Weighted Average 100% $0.24

Investment Conclusion

Based on our comprehensive valuation analysis, Visiomed Group SA's weighted average intrinsic value is $0.24, which is approximately 40.6% above the current market price of $0.17.

Key investment considerations:

  • Strong projected earnings growth (7% to 6% margin)
  • Consistent cash flow generation
  • Conservative capital structure (Debt/Equity of 0.15)

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