As of June 10, 2025, Cascades Inc's estimated intrinsic value ranges from $18.70 to $66.73 per share, depending on the valuation methodology applied.
| Valuation Method | Fair Value (USD) | Implied Upside/Downside |
|---|---|---|
| Discounted Cash Flow (10Y) | $66.73 | +634.2% |
| Discounted Cash Flow (5Y) | $50.72 | +458.0% |
| Dividend Discount Model (Multi-Stage) | $18.70 | +105.8% |
| Earnings Power Value | $44.50 | +389.5% |
Is Cascades Inc (CAS.TO) undervalued or overvalued?
With the current market price at $9.09, the stock appears to be significantly undervalued.
Intrinsic value represents the "true" worth of a company based on its fundamentals rather than market sentiment. We've employed multiple methodologies to triangulate Cascades Inc's intrinsic value, including:
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 | 0.74 | 0.91 |
| Cost of equity | 6.9% | 9.7% |
| Cost of debt | 5.0% | 5.0% |
| Tax rate | 22.1% | 34.2% |
| Debt/Equity ratio | 2.31 | 2.31 |
| After-tax WACC | 4.8% | 5.2% |
Our DCF model projects cash flows over 5-year and 10-year horizons, with the following key assumptions:
| DCF Model | Fair Value | Enterprise Value | % from Terminal Value |
|---|---|---|---|
| 5-Year Growth | $51 | $7,345M | 88.1% |
| 10-Year Growth | $67 | $8,964M | 77.5% |
| 5-Year EBITDA | $24 | $4,664M | 81.2% |
| 10-Year EBITDA | $37 | $5,988M | 66.4% |
The DDM values a company based on its expected future dividend payments. We used two approaches:
EPV assesses a company's value based on its current normalized earnings power, assuming no growth.
| EPV Component | Value |
|---|---|
| Normalized Earnings | $336M |
| Discount Rate (WACC) | 5.2% - 4.8% |
| Enterprise Value | $6,443M - $6,989M |
| Net Debt | $2,216M |
| Equity Value | $4,227M - $4,773M |
| Outstanding Shares | 101M |
| Fair Value | $42 - $47 |
| Selected Fair Value | $44.50 |
| Metric | Value |
|---|---|
| Market Capitalization | $919M |
| Enterprise Value | $3135M |
| Trailing P/E | 0.00 |
| Forward P/E | 39.11 |
| Trailing EV/EBITDA | 7.05 |
| Current Dividend Yield | 522.20% |
| Dividend Growth Rate (5Y) | 11.55% |
| Debt-to-Equity Ratio | 2.31 |
To determine the most reliable intrinsic value estimate, we weigh each valuation method based on:
| Valuation Method | Weight | Weighted Value |
|---|---|---|
| Discounted Cash Flow (10Y) | 35% | $20.02 |
| Discounted Cash Flow (5Y) | 29% | $12.68 |
| Dividend Discount Model (Multi-Stage) | 24% | $3.74 |
| Earnings Power Value | 12% | $4.45 |
| Weighted Average | 100% | $48.11 |
Based on our comprehensive valuation analysis, Cascades Inc's weighted average intrinsic value is $48.11, which is approximately 429.2% above the current market price of $9.09.
Key investment considerations:
Given these factors, we believe Cascades Inc is currently significantly undervalued with the potential for long-term appreciation based on the company's growth trajectory and financial strength.