What is AXS.L's Intrinsic value?

Accsys Technologies PLC (AXS.L) Intrinsic Value Analysis

Executive Summary

As of June 4, 2025, Accsys Technologies PLC's estimated intrinsic value ranges from $7.38 to $236.55 per share, depending on the valuation methodology applied.

Valuation Method Fair Value (USD) Implied Upside/Downside
Discounted Cash Flow (10Y) $236.55 +271.9%
Dividend Discount Model (Multi-Stage) $7.38 -88.4%

Is Accsys Technologies PLC (AXS.L) undervalued or overvalued?

With the current market price at $63.60, 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 Accsys Technologies PLC'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

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 4.0% 4.5%
Equity market risk premium 6.0% 7.0%
Adjusted beta 0.38 0.44
Cost of equity 6.2% 8.1%
Cost of debt 4.0% 7.6%
Tax rate 26.9% 48.8%
Debt/Equity ratio 0.48 0.48
After-tax WACC 5.2% 6.7%

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: 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 $136 (FY03-2024) to $308 (FY03-2034)
  • Net profit margin expansion from -13% to 3%
  • Capital expenditures maintained at approximately 19% of revenue
DCF Model Fair Value Enterprise Value % from Terminal Value
5-Year Growth $(1,234) $(100)M 91.6%
10-Year Growth $281 $576M 93.2%
5-Year EBITDA $153 $333M 102.5%
10-Year EBITDA $266 $548M 92.8%

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: 0.0%
  • Stable payout ratio: 90.0%
  • Growth transition: 5 years
  • Cost of equity: 7.1%
  • Long-term growth rate: 4.0%
  • Fair value: $7.38 (-88.4% from current price)

Stable DDM:

  • Stable payout ratio: 70% (Low) to 90% (High)
  • Cost of equity: 8.1% (Low) to 6.2% (High)
  • Long-term growth rate: 3.0% (Low) to 4.9% (High)
  • Fair value range: $(231) to $(1,137)
  • Selected fair value: $-576.62 (-1006.6% from current price)

Key Financial Metrics

Metric Value
Market Capitalization $121M
Enterprise Value $155M
Trailing P/E 0.00
Forward P/E 0.00
Trailing EV/EBITDA 10.60
Current Dividend Yield 147.82%
Dividend Growth Rate (5Y) 0.00%
Debt-to-Equity Ratio 0.48

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) 60% $70.97
Dividend Discount Model (Multi-Stage) 40% $1.48
Weighted Average 100% $144.88

Investment Conclusion

Based on our comprehensive valuation analysis, Accsys Technologies PLC's weighted average intrinsic value is $144.88, which is approximately 127.8% above the current market price of $63.60.

Key investment considerations:

  • Strong projected earnings growth (-13% to 3% margin)
  • Consistent cash flow generation

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