What is ASY.PA's Intrinsic value?

Assystem SA (ASY.PA) Intrinsic Value Analysis

Executive Summary

As of May 23, 2025, Assystem SA's estimated intrinsic value ranges from $63.88 to $150.61 per share, depending on the valuation methodology applied.

Valuation Method Fair Value (USD) Implied Upside/Downside
Dividend Discount Model (Multi-Stage) $71.72 +71.0%
Dividend Discount Model (Stable) $63.88 +52.3%
Earnings Power Value $150.61 +259.0%

Is Assystem SA (ASY.PA) undervalued or overvalued?

With the current market price at $41.95, 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 Assystem SA's intrinsic value, including:

  1. Dividend Discount Model (DDM): Values the company based on expected future dividend payments
  2. 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 0.36 0.42
Cost of equity 5.1% 6.9%
Cost of debt 5.0% 5.0%
Tax rate 17.6% 21.0%
Debt/Equity ratio 0.19 0.19
After-tax WACC 4.9% 6.4%

Valuation Methods

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: 2236.1%
  • Stable payout ratio: 90.0%
  • Growth transition: 5 years
  • Cost of equity: 6.0%
  • Long-term growth rate: 3.8%
  • Fair value: $71.72 (71.0% from current price)

Stable DDM:

  • Stable payout ratio: 70% (Low) to 90% (High)
  • Cost of equity: 6.9% (Low) to 5.1% (High)
  • Long-term growth rate: 3.0% (Low) to 4.7% (High)
  • Fair value range: $10 to $118
  • Selected fair value: $63.88 (52.3% 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 $136M
Discount Rate (WACC) 6.4% - 4.9%
Enterprise Value $2,132M - $2,758M
Net Debt $85M
Equity Value $2,047M - $2,673M
Outstanding Shares 16M
Fair Value $131 - $171
Selected Fair Value $150.61

Key Financial Metrics

Metric Value
Market Capitalization $657M
Enterprise Value $743M
Trailing P/E 79.20
Forward P/E 61.69
Trailing EV/EBITDA 8.80
Current Dividend Yield 2961.07%
Dividend Growth Rate (5Y) 84.55%
Debt-to-Equity Ratio 0.19

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
Dividend Discount Model (Multi-Stage) 44% $14.34
Dividend Discount Model (Stable) 33% $9.58
Earnings Power Value 22% $15.06
Weighted Average 100% $86.63

Investment Conclusion

Based on our comprehensive valuation analysis, Assystem SA's weighted average intrinsic value is $86.63, which is approximately 106.5% above the current market price of $41.95.

Key investment considerations:

  • Strong projected earnings growth (1% to 2% margin)
  • Consistent cash flow generation
  • Conservative capital structure (Debt/Equity of 0.19)
  • Historical dividend growth of 84.55%

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