As of May 31, 2025, Firm Capital Mortgage Investment Corp's estimated intrinsic value ranges from $8.84 to $22.37 per share, depending on the valuation methodology applied.
| Valuation Method | Fair Value (USD) | Implied Upside/Downside |
|---|---|---|
| Discounted Cash Flow (10Y) | $14.05 | +13.9% |
| Discounted Cash Flow (5Y) | $14.21 | +15.2% |
| Dividend Discount Model (Multi-Stage) | $11.53 | -6.5% |
| Dividend Discount Model (Stable) | $22.37 | +81.4% |
| Earnings Power Value | $8.84 | -28.3% |
Is Firm Capital Mortgage Investment Corp (FC.TO) undervalued or overvalued?
With the current market price at $12.33, 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 Firm Capital Mortgage Investment 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 | 0.65 | 0.73 |
| Cost of equity | 6.5% | 8.6% |
| Cost of debt | 4.9% | 5.3% |
| Tax rate | 25.9% | 26.5% |
| Debt/Equity ratio | 0.45 | 0.45 |
| After-tax WACC | 5.6% | 7.2% |
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 | $14 | $722M | 83.8% |
| 10-Year Growth | $14 | $716M | 70.5% |
| 5-Year EBITDA | $7 | $450M | 74.0% |
| 10-Year EBITDA | $8 | $489M | 56.9% |
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) | 7.2% - 5.6% |
| Enterprise Value | $461M - $589M |
| Net Debt | $200M |
| Equity Value | $261M - $389M |
| Outstanding Shares | 37M |
| Fair Value | $7 - $11 |
| Selected Fair Value | $8.84 |
| Metric | Value |
|---|---|
| Market Capitalization | $453M |
| Enterprise Value | $653M |
| Trailing P/E | 12.86 |
| Forward P/E | 19.12 |
| Trailing EV/EBITDA | 12.65 |
| Current Dividend Yield | 783.18% |
| Dividend Growth Rate (5Y) | 4.72% |
| Debt-to-Equity Ratio | 0.45 |
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% | $4.21 |
| Discounted Cash Flow (5Y) | 25% | $3.55 |
| Dividend Discount Model (Multi-Stage) | 20% | $2.31 |
| Dividend Discount Model (Stable) | 15% | $3.35 |
| Earnings Power Value | 10% | $0.88 |
| Weighted Average | 100% | $14.31 |
Based on our comprehensive valuation analysis, Firm Capital Mortgage Investment Corp's weighted average intrinsic value is $14.31, which is approximately 16.1% above the current market price of $12.33.
Key investment considerations:
Given these factors, we believe Firm Capital Mortgage Investment Corp is currently moderately undervalued with the potential for long-term appreciation based on the company's growth trajectory and financial strength.