What is EBQ.L's Intrinsic value?

Ebiquity PLC (EBQ.L) Intrinsic Value Analysis

Executive Summary

As of May 25, 2025, Ebiquity PLC's estimated intrinsic value ranges from $173.25 to $173.25 per share, depending on the valuation methodology applied.

Valuation Method Fair Value (USD) Implied Upside/Downside
Earnings Power Value $173.25 +607.1%

Is Ebiquity PLC (EBQ.L) undervalued or overvalued?

With the current market price at $24.50, 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 Ebiquity PLC'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 4.0% 4.5%
Equity market risk premium 6.0% 7.0%
Adjusted beta 0.45 0.49
Cost of equity 6.7% 8.4%
Cost of debt 5.0% 5.0%
Tax rate 14.2% 23.1%
Debt/Equity ratio 0.77 0.77
After-tax WACC 5.7% 6.4%

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 $16M
Discount Rate (WACC) 6.4% - 5.7%
Enterprise Value $243M - $275M
Net Debt $19M
Equity Value $224M - $256M
Outstanding Shares 1M
Fair Value $162 - $185
Selected Fair Value $173.25

Key Financial Metrics

Metric Value
Market Capitalization $34M
Enterprise Value $53M
Trailing P/E 0.00
Forward P/E 0.00
Trailing EV/EBITDA 5.45
Current Dividend Yield 0.00%
Dividend Growth Rate (5Y) -100.00%
Debt-to-Equity Ratio 0.77

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% $17.32
Weighted Average 100% $173.25

Investment Conclusion

Based on our comprehensive valuation analysis, Ebiquity PLC's weighted average intrinsic value is $173.25, which is approximately 607.1% above the current market price of $24.50.

Key investment considerations:

  • Strong projected earnings growth (-6% to -3% margin)
  • Consistent cash flow generation

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