What is DGKLB.IS's Intrinsic value?

Dogtas Kelebek Mobilya Sanayi ve Ticaret AS (DGKLB.IS) Intrinsic Value Analysis

Executive Summary

As of June 21, 2025, Dogtas Kelebek Mobilya Sanayi ve Ticaret AS's estimated intrinsic value ranges from $0.67 to $1.48 per share, depending on the valuation methodology applied.

Valuation Method Fair Value (USD) Implied Upside/Downside
Discounted Cash Flow (10Y) $1.48 -31.3%
Discounted Cash Flow (5Y) $1.03 -52.2%
Dividend Discount Model (Multi-Stage) $0.98 -54.4%
Dividend Discount Model (Stable) $0.67 -68.8%

Is Dogtas Kelebek Mobilya Sanayi ve Ticaret AS (DGKLB.IS) undervalued or overvalued?

With the current market price at $2.16, the stock appears to be significantly overvalued.

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 Dogtas Kelebek Mobilya Sanayi ve Ticaret AS's intrinsic value, including:

  1. Discounted Cash Flow (DCF): Values the company based on projected future cash flows
  2. 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 21.4% 21.9%
Equity market risk premium 10.2% 11.2%
Adjusted beta 0.71 0.74
Cost of equity 28.6% 30.6%
Cost of debt 22.0% 22.0%
Tax rate 9.8% 16.0%
Debt/Equity ratio 0.78 0.78
After-tax WACC 24.8% 25.3%

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: 5-year DCF and 10-year DCF
  • Terminal Growth Rate: 0.0% (range: 3.0% - 5.0%)
  • Discount Rate: 25.1% (range: 0.0% - 9.3%)

Key Projections:

  • Revenue growth from $995 (FY12-2020) to $1,692 (FY12-2030)
  • Net profit margin expansion from 3% to 18%
  • Capital expenditures maintained at approximately 4% of revenue
DCF Model Fair Value Enterprise Value % from Terminal Value
5-Year Growth $1 $1,045M 46.7%
10-Year Growth $1 $1,203M 19.9%
5-Year EBITDA $2 $1,371M 59.4%
10-Year EBITDA $2 $1,360M 29.2%

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: 29.6%
  • Long-term growth rate: 4.0%
  • Fair value: $0.98 (-54.4% from current price)

Stable DDM:

  • Stable payout ratio: 70% (Low) to 90% (High)
  • Cost of equity: 30.6% (Low) to 28.6% (High)
  • Long-term growth rate: 3.0% (Low) to 5.0% (High)
  • Fair value range: $1 to $1
  • Selected fair value: $0.67 (-68.8% from current price)

Key Financial Metrics

Metric Value
Market Capitalization $756M
Enterprise Value $1440M
Trailing P/E 10.16
Forward P/E 13.32
Trailing EV/EBITDA 6.15
Current Dividend Yield 0.00%
Dividend Growth Rate (5Y) 0.00%
Debt-to-Equity Ratio 0.78

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) 33% $0.45
Discounted Cash Flow (5Y) 28% $0.26
Dividend Discount Model (Multi-Stage) 22% $0.20
Dividend Discount Model (Stable) 17% $0.10
Weighted Average 100% $1.11

Investment Conclusion

Based on our comprehensive valuation analysis, Dogtas Kelebek Mobilya Sanayi ve Ticaret AS's weighted average intrinsic value is $1.11, which is approximately 48.5% below the current market price of $2.16.

Key investment considerations:

  • Strong projected earnings growth (3% to 18% margin)
  • Consistent cash flow generation

Given these factors, we believe Dogtas Kelebek Mobilya Sanayi ve Ticaret AS is currently significantly overvalued with the potential for long-term appreciation based on the company's growth trajectory and financial strength.