As of June 14, 2025, Cervus Equipment Corp's estimated intrinsic value ranges from $15.30 to $26.81 per share, depending on the valuation methodology applied.
| Valuation Method | Fair Value (USD) | Implied Upside/Downside |
|---|---|---|
| Discounted Cash Flow (10Y) | $19.34 | -0.8% |
| Discounted Cash Flow (5Y) | $21.38 | +9.7% |
| Dividend Discount Model (Multi-Stage) | $17.70 | -9.2% |
| Dividend Discount Model (Stable) | $26.81 | +37.6% |
| Earnings Power Value | $15.30 | -21.5% |
Is Cervus Equipment Corp (CERV.TO) undervalued or overvalued?
With the current market price at $19.49, the stock appears to be fairly valued.
Intrinsic value represents the "true" worth of a company based on its fundamentals rather than market sentiment. We've employed multiple methodologies to triangulate Cervus Equipment Corp'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 | 3.4% | 3.9% |
| Equity market risk premium | 4.7% | 5.7% |
| Adjusted beta | 1.34 | 1.42 |
| Cost of equity | 9.7% | 12.5% |
| Cost of debt | 4.6% | 4.7% |
| Tax rate | 25.2% | 27.0% |
| Debt/Equity ratio | 0.59 | 0.59 |
| After-tax WACC | 7.4% | 9.1% |
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 | $21 | $506M | 88.6% |
| 10-Year Growth | $19 | $474M | 68.8% |
| 5-Year EBITDA | $12 | $361M | 84.1% |
| 10-Year EBITDA | $15 | $409M | 63.8% |
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 | $34M |
| Discount Rate (WACC) | 9.1% - 7.4% |
| Enterprise Value | $368M - $455M |
| Net Debt | $175M |
| Equity Value | $193M - $280M |
| Outstanding Shares | 15M |
| Fair Value | $12 - $18 |
| Selected Fair Value | $15.30 |
| Metric | Value |
|---|---|
| Market Capitalization | $301M |
| Enterprise Value | $476M |
| Trailing P/E | 8.83 |
| Forward P/E | 11.33 |
| Trailing EV/EBITDA | 6.30 |
| Current Dividend Yield | 94.64% |
| Dividend Growth Rate (5Y) | -11.85% |
| Debt-to-Equity Ratio | 0.59 |
To determine the most reliable intrinsic value estimate, we weigh each valuation method based on:
| Valuation Method | Weight | Weighted Value |
|---|---|---|
| Discounted Cash Flow (10Y) | 30% | $5.80 |
| Discounted Cash Flow (5Y) | 25% | $5.34 |
| Dividend Discount Model (Multi-Stage) | 20% | $3.54 |
| Dividend Discount Model (Stable) | 15% | $4.02 |
| Earnings Power Value | 10% | $1.53 |
| Weighted Average | 100% | $20.24 |
Based on our comprehensive valuation analysis, Cervus Equipment Corp's weighted average intrinsic value is $20.24, which is approximately 3.8% above the current market price of $19.49.
Key investment considerations:
Given these factors, we believe Cervus Equipment Corp is currently fairly valued with the potential for long-term appreciation based on the company's growth trajectory and financial strength.