As of May 28, 2025, Evoqua Water Technologies Corp's estimated intrinsic value ranges from $4.64 to $62.83 per share, depending on the valuation methodology applied.
| Valuation Method | Fair Value (USD) | Implied Upside/Downside |
|---|---|---|
| Discounted Cash Flow (10Y) | $62.83 | +26.0% |
| Discounted Cash Flow (5Y) | $45.30 | -9.2% |
| Dividend Discount Model (Multi-Stage) | $35.09 | -29.6% |
| Dividend Discount Model (Stable) | $13.71 | -72.5% |
| Earnings Power Value | $4.64 | -90.7% |
Is Evoqua Water Technologies Corp (AQUA) undervalued or overvalued?
With the current market price at $49.88, the stock appears to be significantly overvalued.
Intrinsic value represents the "true" worth of a company based on its fundamentals rather than market sentiment. We've employed multiple methodologies to triangulate Evoqua Water Technologies Corp's intrinsic value, including:
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 | 3.9% | 4.4% |
| Equity market risk premium | 4.6% | 5.6% |
| Adjusted beta | 0.84 | 0.94 |
| Cost of equity | 7.7% | 10.1% |
| Cost of debt | 4.0% | 5.6% |
| Tax rate | 13.1% | 32.1% |
| Debt/Equity ratio | 0.15 | 0.15 |
| After-tax WACC | 7.2% | 9.3% |
Our DCF model projects cash flows over 5-year and 10-year horizons, with the following key assumptions:
| DCF Model | Fair Value | Enterprise Value | % from Terminal Value |
|---|---|---|---|
| 5-Year Growth | $45 | $6,316M | 85.1% |
| 10-Year Growth | $63 | $8,461M | 72.2% |
| 5-Year EBITDA | $48 | $6,646M | 85.8% |
| 10-Year EBITDA | $62 | $8,403M | 72.0% |
The DDM values a company based on its expected future dividend payments. We used two approaches:
EPV assesses a company's value based on its current normalized earnings power, assuming no growth.
| EPV Component | Value |
|---|---|
| Normalized Earnings | $109M |
| Discount Rate (WACC) | 9.3% - 7.2% |
| Enterprise Value | $1,168M - $1,513M |
| Net Debt | $773M |
| Equity Value | $395M - $739M |
| Outstanding Shares | 122M |
| Fair Value | $3 - $6 |
| Selected Fair Value | $4.64 |
| Metric | Value |
|---|---|
| Market Capitalization | $6104M |
| Enterprise Value | $6877M |
| Trailing P/E | 77.48 |
| Forward P/E | 51.36 |
| Trailing EV/EBITDA | 15.10 |
| Current Dividend Yield | 0.00% |
| Dividend Growth Rate (5Y) | 0.00% |
| Debt-to-Equity Ratio | 0.15 |
To determine the most reliable intrinsic value estimate, we weigh each valuation method based on:
| Valuation Method | Weight | Weighted Value |
|---|---|---|
| Discounted Cash Flow (10Y) | 30% | $18.85 |
| Discounted Cash Flow (5Y) | 25% | $11.32 |
| Dividend Discount Model (Multi-Stage) | 20% | $7.02 |
| Dividend Discount Model (Stable) | 15% | $2.06 |
| Earnings Power Value | 10% | $0.46 |
| Weighted Average | 100% | $39.71 |
Based on our comprehensive valuation analysis, Evoqua Water Technologies Corp's weighted average intrinsic value is $39.71, which is approximately 20.4% below the current market price of $49.88.
Key investment considerations:
Given these factors, we believe Evoqua Water Technologies Corp is currently significantly overvalued with the potential for long-term appreciation based on the company's growth trajectory and financial strength.