As of June 9, 2025, Extendicare Inc's estimated intrinsic value ranges from $3.98 to $20.80 per share, depending on the valuation methodology applied.
| Valuation Method | Fair Value (USD) | Implied Upside/Downside |
|---|---|---|
| Discounted Cash Flow (10Y) | $20.80 | +45.0% |
| Discounted Cash Flow (5Y) | $18.72 | +30.6% |
| Dividend Discount Model (Multi-Stage) | $14.87 | +3.7% |
| Dividend Discount Model (Stable) | $17.55 | +22.4% |
| Earnings Power Value | $3.98 | -72.2% |
Is Extendicare Inc (EXE.TO) undervalued or overvalued?
With the current market price at $14.34, the stock appears to be moderately undervalued.
Intrinsic value represents the "true" worth of a company based on its fundamentals rather than market sentiment. We've employed multiple methodologies to triangulate Extendicare Inc'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 | 0.57 | 0.79 |
| Cost of equity | 6.1% | 9.0% |
| Cost of debt | 4.0% | 4.5% |
| Tax rate | 24.5% | 25.9% |
| Debt/Equity ratio | 0.24 | 0.24 |
| After-tax WACC | 5.5% | 7.9% |
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 | $19 | $1,747M | 80.0% |
| 10-Year Growth | $21 | $1,921M | 64.9% |
| 5-Year EBITDA | $17 | $1,567M | 77.7% |
| 10-Year EBITDA | $19 | $1,751M | 61.5% |
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 | $33M |
| Discount Rate (WACC) | 7.9% - 5.5% |
| Enterprise Value | $418M - $604M |
| Net Debt | $177M |
| Equity Value | $241M - $427M |
| Outstanding Shares | 84M |
| Fair Value | $3 - $5 |
| Selected Fair Value | $3.98 |
| Metric | Value |
|---|---|
| Market Capitalization | $1202M |
| Enterprise Value | $1379M |
| Trailing P/E | 15.58 |
| Forward P/E | 15.66 |
| Trailing EV/EBITDA | 7.45 |
| Current Dividend Yield | 333.18% |
| Dividend Growth Rate (5Y) | -0.78% |
| Debt-to-Equity Ratio | 0.24 |
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% | $6.24 |
| Discounted Cash Flow (5Y) | 25% | $4.68 |
| Dividend Discount Model (Multi-Stage) | 20% | $2.97 |
| Dividend Discount Model (Stable) | 15% | $2.63 |
| Earnings Power Value | 10% | $0.40 |
| Weighted Average | 100% | $16.93 |
Based on our comprehensive valuation analysis, Extendicare Inc's weighted average intrinsic value is $16.93, which is approximately 18.0% above the current market price of $14.34.
Key investment considerations:
Given these factors, we believe Extendicare Inc is currently moderately undervalued with the potential for long-term appreciation based on the company's growth trajectory and financial strength.