As of June 3, 2025, Exchange Income Corp's estimated intrinsic value ranges from $23.93 to $103.56 per share, depending on the valuation methodology applied.
| Valuation Method | Fair Value (USD) | Implied Upside/Downside |
|---|---|---|
| Discounted Cash Flow (10Y) | $103.56 | +79.9% |
| Discounted Cash Flow (5Y) | $31.86 | -44.7% |
| Dividend Discount Model (Multi-Stage) | $63.41 | +10.1% |
| Dividend Discount Model (Stable) | $23.93 | -58.4% |
| Earnings Power Value | $31.00 | -46.2% |
Is Exchange Income Corp (EIF.TO) undervalued or overvalued?
With the current market price at $57.57, the stock appears to be fairly valued.
Intrinsic value represents the "true" worth of a company based on its fundamentals rather than market sentiment. We've employed multiple methodologies to triangulate Exchange Income Corp's intrinsic value, including:
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 | 3.2% | 3.7% |
| Equity market risk premium | 5.1% | 6.1% |
| Adjusted beta | 1.01 | 1.14 |
| Cost of equity | 8.3% | 11.1% |
| Cost of debt | 4.9% | 6.3% |
| Tax rate | 27.5% | 27.7% |
| Debt/Equity ratio | 0.79 | 0.79 |
| After-tax WACC | 6.2% | 8.2% |
Our DCF model projects cash flows over 5-year and 10-year horizons, with the following key assumptions:
| DCF Model | Fair Value | Enterprise Value | % from Terminal Value |
|---|---|---|---|
| 5-Year Growth | $32 | $3,865M | 77.0% |
| 10-Year Growth | $104 | $7,547M | 66.7% |
| 5-Year EBITDA | $73 | $5,991M | 85.1% |
| 10-Year EBITDA | $114 | $8,064M | 68.8% |
The DDM values a company based on its expected future dividend payments. We used two approaches:
EPV assesses a company's value based on its current normalized earnings power, assuming no growth.
| EPV Component | Value |
|---|---|
| Normalized Earnings | $270M |
| Discount Rate (WACC) | 8.2% - 6.2% |
| Enterprise Value | $3,283M - $4,359M |
| Net Debt | $2,229M |
| Equity Value | $1,054M - $2,130M |
| Outstanding Shares | 51M |
| Fair Value | $21 - $41 |
| Selected Fair Value | $31.00 |
| Metric | Value |
|---|---|
| Market Capitalization | $2956M |
| Enterprise Value | $5185M |
| Trailing P/E | 23.86 |
| Forward P/E | 17.77 |
| Trailing EV/EBITDA | 5.55 |
| Current Dividend Yield | 433.89% |
| Dividend Growth Rate (5Y) | 12.00% |
| Debt-to-Equity Ratio | 0.79 |
To determine the most reliable intrinsic value estimate, we weigh each valuation method based on:
| Valuation Method | Weight | Weighted Value |
|---|---|---|
| Discounted Cash Flow (10Y) | 30% | $31.07 |
| Discounted Cash Flow (5Y) | 25% | $7.96 |
| Dividend Discount Model (Multi-Stage) | 20% | $12.68 |
| Dividend Discount Model (Stable) | 15% | $3.59 |
| Earnings Power Value | 10% | $3.10 |
| Weighted Average | 100% | $58.40 |
Based on our comprehensive valuation analysis, Exchange Income Corp's weighted average intrinsic value is $58.40, which is approximately 1.4% above the current market price of $57.57.
Key investment considerations:
Given these factors, we believe Exchange Income Corp is currently fairly valued with the potential for long-term appreciation based on the company's growth trajectory and financial strength.