As of May 22, 2025, First Derivatives PLC's estimated intrinsic value ranges from $420.62 to $1650.10 per share, depending on the valuation methodology applied.
| Valuation Method | Fair Value (USD) | Implied Upside/Downside |
|---|---|---|
| Discounted Cash Flow (10Y) | $1650.10 | -32.0% |
| Discounted Cash Flow (5Y) | $1348.12 | -44.4% |
| Dividend Discount Model (Multi-Stage) | $789.01 | -67.5% |
| Earnings Power Value | $420.62 | -82.7% |
Is First Derivatives PLC (FDP.L) undervalued or overvalued?
With the current market price at $2425.00, the stock appears to be significantly overvalued.
Intrinsic value represents the "true" worth of a company based on its fundamentals rather than market sentiment. We've employed multiple methodologies to triangulate First Derivatives PLC'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 | 4.0% | 4.5% |
| Equity market risk premium | 6.0% | 7.0% |
| Adjusted beta | 0.42 | 0.69 |
| Cost of equity | 6.5% | 9.8% |
| Cost of debt | 5.0% | 7.0% |
| Tax rate | 24.9% | 46.2% |
| Debt/Equity ratio | 0.09 | 0.09 |
| After-tax WACC | 6.3% | 9.3% |
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 | $1,348 | $329M | 83.1% |
| 10-Year Growth | $1,650 | $396M | 71.1% |
| 5-Year EBITDA | $953 | $241M | 76.9% |
| 10-Year EBITDA | $1,142 | $283M | 59.6% |
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 | $9M |
| Discount Rate (WACC) | 9.3% - 6.3% |
| Enterprise Value | $100M - $147M |
| Net Debt | $30M |
| Equity Value | $70M - $117M |
| Outstanding Shares | 0M |
| Fair Value | $314 - $527 |
| Selected Fair Value | $420.62 |
| Metric | Value |
|---|---|
| Market Capitalization | $538M |
| Enterprise Value | $568M |
| Trailing P/E | 0.00 |
| Forward P/E | 0.00 |
| Trailing EV/EBITDA | 7.20 |
| Current Dividend Yield | 0.00% |
| Dividend Growth Rate (5Y) | -100.00% |
| Debt-to-Equity Ratio | 0.09 |
To determine the most reliable intrinsic value estimate, we weigh each valuation method based on:
| Valuation Method | Weight | Weighted Value |
|---|---|---|
| Discounted Cash Flow (10Y) | 35% | $495.03 |
| Discounted Cash Flow (5Y) | 29% | $337.03 |
| Dividend Discount Model (Multi-Stage) | 24% | $157.80 |
| Earnings Power Value | 12% | $42.06 |
| Weighted Average | 100% | $1214.03 |
Based on our comprehensive valuation analysis, First Derivatives PLC's weighted average intrinsic value is $1214.03, which is approximately 49.9% below the current market price of $2425.00.
Key investment considerations:
Given these factors, we believe First Derivatives PLC is currently significantly overvalued with the potential for long-term appreciation based on the company's growth trajectory and financial strength.