What is BUS.V's Intrinsic value?

Grande West Transportation Group Inc (BUS.V) Intrinsic Value Analysis

Executive Summary

As of June 21, 2025, Grande West Transportation Group Inc's estimated intrinsic value ranges from $0.13 to $0.13 per share, depending on the valuation methodology applied.

Valuation Method Fair Value (USD) Implied Upside/Downside
Discounted Cash Flow (10Y) $0.13 -98.2%

Is Grande West Transportation Group Inc (BUS.V) undervalued or overvalued?

With the current market price at $7.15, the stock appears to be significantly overvalued.

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 Grande West Transportation Group Inc's intrinsic value, including:

  1. Discounted Cash Flow (DCF): Values the company based on projected future cash flows

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 4.7% 5.7%
Adjusted beta 0.76 0.8
Cost of equity 6.7% 8.8%
Cost of debt 7.0% 7.1%
Tax rate 27.0% 27.0%
Debt/Equity ratio 0.03 0.03
After-tax WACC 6.7% 8.6%

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: 7.7% (range: 0.0% - 9.3%)

Key Projections:

  • Revenue growth from $25 (FY12-2019) to $33 (FY12-2029)
  • Net profit margin expansion from -20% to 1%
  • Capital expenditures maintained at approximately 1% of revenue
DCF Model Fair Value Enterprise Value % from Terminal Value
5-Year Growth $(1,234) $(9)M 87.9%
10-Year Growth $0 $11M 96.0%
5-Year EBITDA $(1,234) $(2)M 45.2%
10-Year EBITDA $(1,234) $6M 92.1%

Key Financial Metrics

Metric Value
Market Capitalization $256M
Enterprise Value $263M
Trailing P/E 0.00
Forward P/E 0.00
Trailing EV/EBITDA 6.35
Current Dividend Yield 0.00%
Dividend Growth Rate (5Y) 0.00%
Debt-to-Equity Ratio 0.03

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) 100% $0.04
Weighted Average 100% $0.13

Investment Conclusion

Based on our comprehensive valuation analysis, Grande West Transportation Group Inc's weighted average intrinsic value is $0.13, which is approximately 98.2% below the current market price of $7.15.

Key investment considerations:

  • Strong projected earnings growth (-20% to 1% margin)
  • Conservative capital structure (Debt/Equity of 0.03)

Given these factors, we believe Grande West Transportation Group Inc is currently significantly overvalued with the potential for long-term appreciation based on the company's growth trajectory and financial strength.