What is CNF.MI's Intrinsic value?

Conafi Prestito SpA (CNF.MI) Intrinsic Value Analysis

Executive Summary

As of May 25, 2025, Conafi Prestito SpA's estimated intrinsic value ranges from $0.24 to $0.24 per share, depending on the valuation methodology applied.

Valuation Method Fair Value (USD) Implied Upside/Downside
Earnings Power Value $0.24 +63.4%

Is Conafi Prestito SpA (CNF.MI) undervalued or overvalued?

With the current market price at $0.14, 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 Conafi Prestito SpA's intrinsic value, including:

  1. Earnings Power Value (EPV): Values the company based on its current earnings power, assuming no growth

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 3.7% 4.2%
Equity market risk premium 8.3% 9.3%
Adjusted beta 0.36 0.42
Cost of equity 6.6% 8.6%
Cost of debt 5.0% 5.0%
Tax rate 8.1% 10.7%
Debt/Equity ratio 0.2 0.2
After-tax WACC 6.3% 7.9%

Valuation Methods

3. Earnings Power Value (EPV)

EPV assesses a company's value based on its current normalized earnings power, assuming no growth.

EPV Component Value
Normalized Earnings $0M
Discount Rate (WACC) 7.9% - 6.3%
Enterprise Value $5M - $6M
Net Debt $(3)M
Equity Value $8M - $9M
Outstanding Shares 37M
Fair Value $0 - $0
Selected Fair Value $0.24

Key Financial Metrics

Metric Value
Market Capitalization $5M
Enterprise Value $2M
Trailing P/E 0.00
Forward P/E 0.00
Trailing EV/EBITDA 5.35
Current Dividend Yield 0.00%
Dividend Growth Rate (5Y) -14.76%
Debt-to-Equity Ratio 0.20

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
Earnings Power Value 100% $0.02
Weighted Average 100% $0.24

Investment Conclusion

Based on our comprehensive valuation analysis, Conafi Prestito SpA's weighted average intrinsic value is $0.24, which is approximately 63.4% above the current market price of $0.14.

Key investment considerations:

  • Strong projected earnings growth (-102% to -83% margin)
  • Consistent cash flow generation
  • Conservative capital structure (Debt/Equity of 0.20)

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