What is ALWED.PA's Intrinsic value?

Wedia SA (ALWED.PA) Intrinsic Value Analysis

Executive Summary

As of May 23, 2025, Wedia SA's estimated intrinsic value ranges from $0.93 to $203.71 per share, depending on the valuation methodology applied.

Valuation Method Fair Value (USD) Implied Upside/Downside
Discounted Cash Flow (10Y) $9.05 -70.6%
Discounted Cash Flow (5Y) $17.95 -41.7%
Dividend Discount Model (Multi-Stage) $0.93 -97.0%
Dividend Discount Model (Stable) $203.71 +561.4%
Earnings Power Value $13.05 -57.6%

Is Wedia SA (ALWED.PA) undervalued or overvalued?

With the current market price at $30.80, 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 Wedia 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 0.32 0.47
Cost of equity 5.3% 7.7%
Cost of debt 5.0% 5.0%
Tax rate 19.3% 26.7%
Debt/Equity ratio 0.21 0.21
After-tax WACC 5.1% 7.0%

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: 6.1% (range: 0.0% - 9.3%)

Key Projections:

  • Revenue growth from $14 (FY12-2023) to $20 (FY12-2033)
  • Net profit margin expansion from 0% to 0%
  • Capital expenditures maintained at approximately 12% of revenue
DCF Model Fair Value Enterprise Value % from Terminal Value
5-Year Growth $18 $19M 93.1%
10-Year Growth $9 $12M 78.9%
5-Year EBITDA $11 $14M 90.2%
10-Year EBITDA $10 $13M 80.4%

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: 10.1%
  • Stable payout ratio: 90.0%
  • Growth transition: 5 years
  • Cost of equity: 6.5%
  • Long-term growth rate: 3.9%
  • Fair value: $0.93 (-97.0% from current price)

Stable DDM:

  • Stable payout ratio: 70% (Low) to 90% (High)
  • Cost of equity: 7.7% (Low) to 5.3% (High)
  • Long-term growth rate: 3.0% (Low) to 4.9% (High)
  • Fair value range: $30 to $378
  • Selected fair value: $203.71 (561.4% 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 $1M
Discount Rate (WACC) 7.0% - 5.1%
Enterprise Value $13M - $18M
Net Debt $4M
Equity Value $9M - $14M
Outstanding Shares 1M
Fair Value $10 - $16
Selected Fair Value $13.05

Key Financial Metrics

Metric Value
Market Capitalization $26M
Enterprise Value $30M
Trailing P/E 15.29
Forward P/E 1058.59
Trailing EV/EBITDA 6.30
Current Dividend Yield 66.07%
Dividend Growth Rate (5Y) -13.25%
Debt-to-Equity Ratio 0.21

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% $2.72
Discounted Cash Flow (5Y) 25% $4.49
Dividend Discount Model (Multi-Stage) 20% $0.19
Dividend Discount Model (Stable) 15% $30.56
Earnings Power Value 10% $1.31
Weighted Average 100% $39.25

Investment Conclusion

Based on our comprehensive valuation analysis, Wedia SA's weighted average intrinsic value is $39.25, which is approximately 27.4% above the current market price of $30.80.

Key investment considerations:

  • Strong projected earnings growth (0% to 0% margin)
  • Conservative capital structure (Debt/Equity of 0.21)

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