What is AYR.A.CN's Intrinsic value?

Ayr Wellness Inc (AYR.A.CN) Intrinsic Value Analysis

Executive Summary

As of June 7, 2025, Ayr Wellness Inc's estimated intrinsic value ranges from $0.24 to $0.24 per share, depending on the valuation methodology applied.

Valuation Method Fair Value (USD) Implied Upside/Downside
Earnings Power Value $0.24 +53.1%

Is Ayr Wellness Inc (AYR.A.CN) undervalued or overvalued?

With the current market price at $0.15, 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 Ayr Wellness Inc'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 3.2% 3.7%
Equity market risk premium 5.1% 6.1%
Adjusted beta 2.8 5.6
Cost of equity 17.4% 38.3%
Cost of debt 7.0% 20.0%
Tax rate 25.9% 26.5%
Debt/Equity ratio 18.07 18.07
After-tax WACC 5.8% 15.9%

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 $35M
Discount Rate (WACC) 15.9% - 5.8%
Enterprise Value $222M - $607M
Net Debt $375M
Equity Value $(153)M - $232M
Outstanding Shares 226M
Fair Value $(1) - $1
Selected Fair Value $0.24

Key Financial Metrics

Metric Value
Market Capitalization $35M
Enterprise Value $549M
Trailing P/E 0.00
Forward P/E 0.00
Trailing EV/EBITDA 6.35
Current Dividend Yield 62.96%
Dividend Growth Rate (5Y) 0.00%
Debt-to-Equity Ratio 18.07

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% $0.02
Weighted Average 100% $0.24

Investment Conclusion

Based on our comprehensive valuation analysis, Ayr Wellness Inc's weighted average intrinsic value is $0.24, which is approximately 53.1% above the current market price of $0.15.

Key investment considerations:

  • Strong projected earnings growth (-78% to -39% margin)
  • Consistent cash flow generation

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