As of April 1, 2026, Latvijas balzams AS has a Discounted Cash Flow (DCF) derived fair value of $3.37 per share. With the current market price at $2.10, this represents a potential upside of 60.7%.
| Key Metrics | Value |
|---|---|
| DCF Fair Value (5-year) | $3.35 |
| DCF Fair Value (10-year) | $3.37 |
| Potential Upside (5-year) | 59.6% |
| Potential Upside (10-year) | 60.7% |
| Discount Rate (WACC) | 4.9% - 7.0% |
Revenue is projected to grow from $78 million in 12-2024 to $102 million by 12-2034, representing a compound annual growth rate of approximately 2.7%.
| Fiscal Year | Revenue (USD millions) | Growth |
|---|---|---|
| 12-2024 | 78 | 20% |
| 12-2025 | 76 | -3% |
| 12-2026 | 77 | 2% |
| 12-2027 | 79 | 2% |
| 12-2028 | 80 | 2% |
| 12-2029 | 83 | 3% |
| 12-2030 | 88 | 7% |
| 12-2031 | 92 | 5% |
| 12-2032 | 94 | 2% |
| 12-2033 | 100 | 6% |
| 12-2034 | 102 | 2% |
Net profit margin is expected to improve from 5% in 12-2024 to 4% by 12-2034, driven by operational efficiency and economies of scale.
| Fiscal Year | Net Profit (USD millions) | Profit Margin |
|---|---|---|
| 12-2024 | 4 | 5% |
| 12-2025 | 3 | 4% |
| 12-2026 | 3 | 4% |
| 12-2027 | 3 | 4% |
| 12-2028 | 3 | 4% |
| 12-2029 | 3 | 4% |
| 12-2030 | 4 | 4% |
| 12-2031 | 4 | 4% |
| 12-2032 | 4 | 4% |
| 12-2033 | 4 | 4% |
| 12-2034 | 4 | 4% |
with a 5-year average of $2 million. Projected CapEx is expected to maintain at approximately 2% of revenue.
Depreciation is based on an average useful life of 5 years for capital assets.
| Fiscal Year | D&A (USD millions) |
|---|---|
| 12-2025 | 2 |
| 12-2026 | 2 |
| 12-2027 | 2 |
| 12-2028 | 2 |
| 12-2029 | 2 |
| 12-2030 | 2 |
Net working capital is expected to increase gradually, with projected changes affecting free cash flow.
| Components | Average Days |
|---|---|
| Days Receivables | 7 |
| Days Inventory | 143 |
| Days Payables | 68 |
| Fiscal Year | EBITDA | Tax | CapEx | Change in NWC | FCF |
|---|---|---|---|---|---|
| 6M/2025 | 2 | 0 | 1 | (0) | 1 |
| 2026 | 5 | 1 | 2 | 1 | 1 |
| 2027 | 4 | 1 | 2 | (0) | 2 |
| 2028 | 4 | 1 | 2 | 0 | 1 |
| 2029 | 5 | 1 | 2 | 1 | 1 |
| Valuation Method | Fair Price (USD) | Potential Upside |
|---|---|---|
| 5-Year DCF (Growth) | 3.35 | 59.6% |
| 10-Year DCF (Growth) | 3.37 | 60.7% |
| 5-Year DCF (EBITDA) | 3.40 | 61.7% |
| 10-Year DCF (EBITDA) | 3.77 | 79.6% |
Is Latvijas balzams AS (BAL1R.RG) a buy or a sell? Latvijas balzams AS is definitely a buy. Based on our DCF analysis, Latvijas balzams AS (BAL1R.RG) appears to be significantly undervalued with upside potential of 60.7%. The company's strong projected growth in revenue and profitability, coupled with consistent capital expenditure, supports our positive outlook on its intrinsic value.
Key investment drivers include:
Investors should consider a strong buy at the current market price of $2.10.