What is APGN.SW's Intrinsic value?

APG SGA SA (APGN.SW) Intrinsic Value Analysis

Executive Summary

As of May 23, 2025, APG SGA SA's estimated intrinsic value ranges from $167.87 to $275.03 per share, depending on the valuation methodology applied.

Valuation Method Fair Value (USD) Implied Upside/Downside
Discounted Cash Flow (10Y) $275.03 +17.0%
Discounted Cash Flow (5Y) $271.47 +15.5%
Dividend Discount Model (Multi-Stage) $167.87 -28.6%
Dividend Discount Model (Stable) $179.08 -23.8%
Earnings Power Value $225.91 -3.9%

Is APG SGA SA (APGN.SW) undervalued or overvalued?

With the current market price at $235.00, the stock appears to be fairly valued.

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 APG SGA 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 1.0% 1.5%
Equity market risk premium 5.1% 6.1%
Adjusted beta 1.06 1.16
Cost of equity 6.4% 9.1%
Cost of debt 5.0% 5.0%
Tax rate 17.6% 18.6%
Debt/Equity ratio 1 1
After-tax WACC 5.2% 6.6%

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: 5.9% (range: 0.0% - 9.3%)

Key Projections:

  • Revenue growth from $329 (FY12-2024) to $422 (FY12-2034)
  • Net profit margin expansion from 9% to 9%
  • Capital expenditures maintained at approximately 2% of revenue
DCF Model Fair Value Enterprise Value % from Terminal Value
5-Year Growth $271 $758M 82.9%
10-Year Growth $275 $769M 68.3%
5-Year EBITDA $114 $285M 54.4%
10-Year EBITDA $144 $375M 35.1%

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: 108.8%
  • Stable payout ratio: 90.0%
  • Growth transition: 5 years
  • Cost of equity: 7.7%
  • Long-term growth rate: 2.0%
  • Fair value: $167.87 (-28.6% from current price)

Stable DDM:

  • Stable payout ratio: 70% (Low) to 90% (High)
  • Cost of equity: 9.1% (Low) to 6.4% (High)
  • Long-term growth rate: 1.0% (Low) to 3.0% (High)
  • Fair value range: $88 to $270
  • Selected fair value: $179.08 (-23.8% 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 $36M
Discount Rate (WACC) 6.6% - 5.2%
Enterprise Value $551M - $691M
Net Debt $(56)M
Equity Value $608M - $748M
Outstanding Shares 3M
Fair Value $203 - $249
Selected Fair Value $225.91

Key Financial Metrics

Metric Value
Market Capitalization $705M
Enterprise Value $649M
Trailing P/E 23.29
Forward P/E 22.00
Trailing EV/EBITDA 4.25
Current Dividend Yield 469.36%
Dividend Growth Rate (5Y) -14.46%
Debt-to-Equity Ratio 0.97

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% $82.51
Discounted Cash Flow (5Y) 25% $67.87
Dividend Discount Model (Multi-Stage) 20% $33.57
Dividend Discount Model (Stable) 15% $26.86
Earnings Power Value 10% $22.59
Weighted Average 100% $233.40

Investment Conclusion

Based on our comprehensive valuation analysis, APG SGA SA's weighted average intrinsic value is $233.40, which is approximately 0.7% below the current market price of $235.00.

Key investment considerations:

  • Strong projected earnings growth (9% to 9% margin)
  • Consistent cash flow generation

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