What is CINE.L's Intrinsic value?

Cineworld Group PLC (CINE.L) Intrinsic Value Analysis

Executive Summary

As of May 23, 2025, Cineworld Group PLC's estimated intrinsic value ranges from $394.52 to $394.52 per share, depending on the valuation methodology applied.

Valuation Method Fair Value (USD) Implied Upside/Downside
Discounted Cash Flow (10Y) $394.52 +103447.9%

Is Cineworld Group PLC (CINE.L) undervalued or overvalued?

With the current market price at $0.38, 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 Cineworld Group PLC'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 4.0% 4.5%
Equity market risk premium 6.0% 7.0%
Adjusted beta 19.37 68.39
Cost of equity 119.8% 482.3%
Cost of debt 10.0% 15.8%
Tax rate 15.9% 17.3%
Debt/Equity ratio 1328 1328
After-tax WACC 8.5% 13.4%

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: 11.0% (range: 0.0% - 9.3%)

Key Projections:

  • Revenue growth from $1,805 (FY12-2021) to $14,019 (FY12-2031)
  • Net profit margin expansion from -31% to -17%
  • Capital expenditures maintained at approximately 14% of revenue
DCF Model Fair Value Enterprise Value % from Terminal Value
5-Year Growth $(1,234) $6,789M 78.7%
10-Year Growth $524 $16,004M 66.6%
5-Year EBITDA $(1,234) $5,626M 74.3%
10-Year EBITDA $232 $11,998M 55.4%

Key Financial Metrics

Metric Value
Market Capitalization $5M
Enterprise Value $6637M
Trailing P/E 0.00
Forward P/E 0.00
Trailing EV/EBITDA 5.50
Current Dividend Yield 0.00%
Dividend Growth Rate (5Y) -100.00%
Debt-to-Equity Ratio 1328.00

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% $118.36
Weighted Average 100% $394.52

Investment Conclusion

Based on our comprehensive valuation analysis, Cineworld Group PLC's weighted average intrinsic value is $394.52, which is approximately 103447.9% above the current market price of $0.38.

Key investment considerations:

  • Strong projected earnings growth (-31% to -17% margin)
  • Consistent cash flow generation

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