What is BAMNB.AS's Intrinsic value?

Koninklijke BAM Groep NV (BAMNB.AS) Intrinsic Value Analysis

Executive Summary

As of June 15, 2025, Koninklijke BAM Groep NV's estimated intrinsic value ranges from $3.89 to $79.65 per share, depending on the valuation methodology applied.

Valuation Method Fair Value (USD) Implied Upside/Downside
Discounted Cash Flow (10Y) $10.79 +42.9%
Discounted Cash Flow (5Y) $9.89 +30.9%
Dividend Discount Model (Multi-Stage) $3.89 -48.5%
Dividend Discount Model (Stable) $7.31 -3.3%
Earnings Power Value $79.65 +954.3%

Is Koninklijke BAM Groep NV (BAMNB.AS) undervalued or overvalued?

With the current market price at $7.55, 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 Koninklijke BAM Groep NV'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
  3. 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 5.1% 6.1%
Adjusted beta 0.73 0.78
Cost of equity 6.3% 8.3%
Cost of debt 4.0% 4.9%
Tax rate 12.0% 15.9%
Debt/Equity ratio 0.15 0.15
After-tax WACC 5.9% 7.7%

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: 5-year DCF and 10-year DCF
  • Terminal Growth Rate: 0.0% (range: 3.0% - 5.0%)
  • Discount Rate: 6.8% (range: 0.0% - 9.3%)

Key Projections:

  • Revenue growth from $6,455 (FY12-2024) to $8,672 (FY12-2034)
  • Net profit margin expansion from 1% to 1%
  • Capital expenditures maintained at approximately 1% of revenue
DCF Model Fair Value Enterprise Value % from Terminal Value
5-Year Growth $10 $2,369M 84.5%
10-Year Growth $11 $2,626M 71.4%
5-Year EBITDA $5 $921M 60.1%
10-Year EBITDA $6 $1,201M 37.4%

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: 31.8%
  • Stable payout ratio: 90.0%
  • Growth transition: 5 years
  • Cost of equity: 7.3%
  • Long-term growth rate: 3.0%
  • Fair value: $3.89 (-48.5% from current price)

Stable DDM:

  • Stable payout ratio: 70% (Low) to 90% (High)
  • Cost of equity: 8.3% (Low) to 6.3% (High)
  • Long-term growth rate: 2.0% (Low) to 4.0% (High)
  • Fair value range: $3 to $11
  • Selected fair value: $7.31 (-3.3% 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 $1,489M
Discount Rate (WACC) 7.7% - 5.9%
Enterprise Value $19,241M - $25,125M
Net Debt $(440)M
Equity Value $19,681M - $25,566M
Outstanding Shares 284M
Fair Value $69 - $90
Selected Fair Value $79.65

Key Financial Metrics

Metric Value
Market Capitalization $2146M
Enterprise Value $1706M
Trailing P/E 26.09
Forward P/E 35.37
Trailing EV/EBITDA 3.50
Current Dividend Yield 121.79%
Dividend Growth Rate (5Y) 18.60%
Debt-to-Equity Ratio 0.15

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) 30% $3.24
Discounted Cash Flow (5Y) 25% $2.47
Dividend Discount Model (Multi-Stage) 20% $0.78
Dividend Discount Model (Stable) 15% $1.10
Earnings Power Value 10% $7.96
Weighted Average 100% $15.55

Investment Conclusion

Based on our comprehensive valuation analysis, Koninklijke BAM Groep NV's weighted average intrinsic value is $15.55, which is approximately 105.8% above the current market price of $7.55.

Key investment considerations:

  • Strong projected earnings growth (1% to 1% margin)
  • Consistent cash flow generation
  • Conservative capital structure (Debt/Equity of 0.15)
  • Historical dividend growth of 18.60%

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