What is ATA.PA's Intrinsic value?

Atari SA (ATA.PA) Intrinsic Value Analysis

Executive Summary

As of May 27, 2025, Atari SA's estimated intrinsic value ranges from $0.25 to $0.25 per share, depending on the valuation methodology applied.

Valuation Method Fair Value (USD) Implied Upside/Downside
Earnings Power Value $0.25 +80.5%

Is Atari SA (ATA.PA) undervalued or overvalued?

With the current market price at $0.14, 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 Atari SA's intrinsic value, including:

  1. 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 2.6% 3.1%
Equity market risk premium 5.2% 6.2%
Adjusted beta 0.62 0.91
Cost of equity 5.8% 9.2%
Cost of debt 5.0% 5.0%
Tax rate 29.8% 31.8%
Debt/Equity ratio 0.04 0.04
After-tax WACC 5.8% 9.0%

Valuation Methods

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 $7M
Discount Rate (WACC) 9.0% - 5.8%
Enterprise Value $77M - $121M
Net Debt $2M
Equity Value $75M - $119M
Outstanding Shares 383M
Fair Value $0 - $0
Selected Fair Value $0.25

Key Financial Metrics

Metric Value
Market Capitalization $54M
Enterprise Value $56M
Trailing P/E 0.00
Forward P/E 0.00
Trailing EV/EBITDA 4.20
Current Dividend Yield 0.00%
Dividend Growth Rate (5Y) 0.00%
Debt-to-Equity Ratio 0.04

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
Earnings Power Value 100% $0.03
Weighted Average 100% $0.25

Investment Conclusion

Based on our comprehensive valuation analysis, Atari SA's weighted average intrinsic value is $0.25, which is approximately 80.5% above the current market price of $0.14.

Key investment considerations:

  • Strong projected earnings growth (-62% to -38% margin)
  • Consistent cash flow generation
  • Conservative capital structure (Debt/Equity of 0.04)

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