What is CABP.L's Intrinsic value?

Cab Payments Holdings PLC (CABP.L) Intrinsic Value Analysis

Executive Summary

As of May 25, 2025, Cab Payments Holdings PLC's estimated intrinsic value ranges from $93.60 to $181.51 per share, depending on the valuation methodology applied.

Valuation Method Fair Value (USD) Implied Upside/Downside
Dividend Discount Model (Multi-Stage) $93.60 +124.7%
Dividend Discount Model (Stable) $181.51 +335.8%

Is Cab Payments Holdings PLC (CABP.L) undervalued or overvalued?

With the current market price at $41.65, 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 Cab Payments Holdings PLC's intrinsic value, including:

  1. 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 0.4 2.37
Cost of equity 6.4% 21.5%
Cost of debt 7.0% 7.0%
Tax rate 20.1% 22.9%
Debt/Equity ratio 14.02 14.02
After-tax WACC 5.6% 6.5%

Valuation Methods

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: 13.9%
  • Long-term growth rate: 4.0%
  • Fair value: $93.60 (124.7% from current price)

Stable DDM:

  • Stable payout ratio: 70% (Low) to 90% (High)
  • Cost of equity: 21.5% (Low) to 6.4% (High)
  • Long-term growth rate: 3.0% (Low) to 5.0% (High)
  • Fair value range: $20 to $343
  • Selected fair value: $181.51 (335.8% from current price)

Key Financial Metrics

Metric Value
Market Capitalization $114M
Enterprise Value $645M
Trailing P/E 8.05
Forward P/E 4.82
Trailing EV/EBITDA 9.10
Current Dividend Yield 505.73%
Dividend Growth Rate (5Y) 0.00%
Debt-to-Equity Ratio 14.02

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
Dividend Discount Model (Multi-Stage) 57% $18.72
Dividend Discount Model (Stable) 43% $27.23
Weighted Average 100% $131.28

Investment Conclusion

Based on our comprehensive valuation analysis, Cab Payments Holdings PLC's weighted average intrinsic value is $131.28, which is approximately 215.2% above the current market price of $41.65.

Key investment considerations:

  • Strong projected earnings growth (19% to 29% margin)
  • Consistent cash flow generation

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