What is CRE.V's Intrinsic value?

Critical Elements Lithium Corp (CRE.V) Intrinsic Value Analysis

Executive Summary

As of June 21, 2025, Critical Elements Lithium Corp's estimated intrinsic value ranges from $0.39 to $0.39 per share, depending on the valuation methodology applied.

Valuation Method Fair Value (USD) Implied Upside/Downside
Dividend Discount Model (Stable) $0.39 -0.9%

Is Critical Elements Lithium Corp (CRE.V) undervalued or overvalued?

With the current market price at $0.39, the stock appears to be fairly valued.

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 Critical Elements Lithium Corp'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 3.9% 4.4%
Equity market risk premium 5.1% 6.1%
Adjusted beta 1.07 1.25
Cost of equity 9.3% 12.5%
Cost of debt 5.0% 5.0%
Tax rate 26.2% 27.0%
Debt/Equity ratio 0 0
After-tax WACC 9.3% 12.5%

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: 0.0%
  • Stable payout ratio: 90.0%
  • Growth transition: 5 years
  • Cost of equity: 10.9%
  • Long-term growth rate: 0.5%
  • Fair value: $-0.00 (-100.9% from current price)

Stable DDM:

  • Stable payout ratio: 70% (Low) to 90% (High)
  • Cost of equity: 12.5% (Low) to 9.3% (High)
  • Long-term growth rate: 0.0% (Low) to 1.0% (High)
  • Fair value range: $0 to $1
  • Selected fair value: $0.39 (-0.9% from current price)

Key Financial Metrics

Metric Value
Market Capitalization $85M
Enterprise Value $75M
Trailing P/E 8.28
Forward P/E 8.28
Trailing EV/EBITDA 0.00
Current Dividend Yield 0.00%
Dividend Growth Rate (5Y) 0.00%
Debt-to-Equity Ratio 0.00

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
Dividend Discount Model (Stable) 100% $0.06
Weighted Average 100% $0.39

Investment Conclusion

Based on our comprehensive valuation analysis, Critical Elements Lithium Corp's weighted average intrinsic value is $0.39, which is approximately 0.9% below the current market price of $0.39.

Key investment considerations:

  • Conservative capital structure (Debt/Equity of 0.00)

Given these factors, we believe Critical Elements Lithium Corp is currently fairly valued with the potential for long-term appreciation based on the company's growth trajectory and financial strength.