What is CMBN.SW's Intrinsic value?

Cembra Money Bank AG (CMBN.SW) Intrinsic Value Analysis

Executive Summary

As of May 23, 2025, Cembra Money Bank AG's estimated intrinsic value ranges from $143.34 to $172.13 per share, depending on the valuation methodology applied.

Valuation Method Fair Value (USD) Implied Upside/Downside
Dividend Discount Model (Multi-Stage) $172.13 +66.8%
Dividend Discount Model (Stable) $143.34 +38.9%

Is Cembra Money Bank AG (CMBN.SW) undervalued or overvalued?

With the current market price at $103.20, 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 Cembra Money Bank AG'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 1.0% 1.5%
Equity market risk premium 5.1% 6.1%
Adjusted beta 0.56 0.75
Cost of equity 3.8% 6.5%
Cost of debt 5.0% 5.0%
Tax rate 19.5% 19.5%
Debt/Equity ratio 0.95 0.95
After-tax WACC 3.9% 5.3%

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: 68.9%
  • Stable payout ratio: 90.0%
  • Growth transition: 5 years
  • Cost of equity: 5.2%
  • Long-term growth rate: 1.0%
  • Fair value: $172.13 (66.8% from current price)

Stable DDM:

  • Stable payout ratio: 70% (Low) to 90% (High)
  • Cost of equity: 6.5% (Low) to 3.8% (High)
  • Long-term growth rate: 0.5% (Low) to 1.5% (High)
  • Fair value range: $66 to $221
  • Selected fair value: $143.34 (38.9% from current price)

Key Financial Metrics

Metric Value
Market Capitalization $3096M
Enterprise Value $5996M
Trailing P/E 18.17
Forward P/E 16.36
Trailing EV/EBITDA 0.00
Current Dividend Yield 384.77%
Dividend Growth Rate (5Y) 1.59%
Debt-to-Equity Ratio 0.95

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% $34.43
Dividend Discount Model (Stable) 43% $21.50
Weighted Average 100% $159.79

Investment Conclusion

Based on our comprehensive valuation analysis, Cembra Money Bank AG's weighted average intrinsic value is $159.79, which is approximately 54.8% above the current market price of $103.20.

Key investment considerations:

  • Historical dividend growth of 1.59%

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