What is FIRE.ST's Intrinsic value?

Firefly AB (FIRE.ST) Intrinsic Value Analysis

Executive Summary

As of April 30, 2026, Firefly AB's estimated intrinsic value ranges from $121.71 to $226.76 per share, depending on the valuation methodology applied.

Valuation Method Fair Value (USD) Implied Upside/Downside
Discounted Cash Flow (10Y) $226.76 +20.0%
Discounted Cash Flow (5Y) $179.94 -4.8%
Dividend Discount Model (Multi-Stage) $187.74 -0.7%
Dividend Discount Model (Stable) $183.56 -2.9%
Earnings Power Value $121.71 -35.6%

Is Firefly AB (FIRE.ST) undervalued or overvalued?

With the current market price at $189.00, the stock appears to be fairly valued.

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 Firefly AB's intrinsic value, including:

  1. Discounted Cash Flow (DCF): Values the company based on projected future cash flows
  2. Dividend Discount Model (DDM): Values the company based on expected future dividend payments
  3. 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 2.5% 3.0%
Equity market risk premium 5.1% 6.1%
Adjusted beta 0.59 0.64
Cost of equity 5.5% 7.4%
Cost of debt 4.0% 4.5%
Tax rate 23.9% 24.8%
Debt/Equity ratio 0 0
After-tax WACC 5.5% 7.4%

Valuation Methods

1. Discounted Cash Flow (DCF) Valuation

Our DCF model projects cash flows over 5-year and 10-year horizons, with the following key assumptions:

  • Forecast Period: 5-year DCF and 10-year DCF
  • Terminal Growth Rate: 0.0% (range: 3.0% - 5.0%)
  • Discount Rate: 6.5% (range: 0.0% - 9.3%)

Key Projections:

  • Revenue growth from $503 (FY12-2025) to $1,030 (FY12-2035)
  • Net profit margin expansion from 9% to 9%
  • Capital expenditures maintained at approximately 1% of revenue
DCF Model Fair Value Enterprise Value % from Terminal Value
5-Year Growth $180 $1,000M 84.4%
10-Year Growth $227 $1,281M 70.7%
5-Year EBITDA $174 $962M 83.7%
10-Year EBITDA $214 $1,204M 68.8%

2. Dividend Discount Model (DDM)

The DDM values a company based on its expected future dividend payments. We used two approaches:

Multi-Stage DDM:

  • Current payout ratio: 69.4%
  • Stable payout ratio: 90.0%
  • Growth transition: 5 years
  • Cost of equity: 6.5%
  • Long-term growth rate: 2.0%
  • Fair value: $187.74 (-0.7% from current price)

Stable DDM:

  • Stable payout ratio: 70% (Low) to 90% (High)
  • Cost of equity: 7.4% (Low) to 5.5% (High)
  • Long-term growth rate: 1.0% (Low) to 3.0% (High)
  • Fair value range: $86 to $281
  • Selected fair value: $183.56 (-2.9% from current price)

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 $41M
Discount Rate (WACC) 7.4% - 5.5%
Enterprise Value $556M - $746M
Net Debt $(79)M
Equity Value $635M - $825M
Outstanding Shares 6M
Fair Value $106 - $138
Selected Fair Value $121.71

Key Financial Metrics

Metric Value
Market Capitalization $1134M
Enterprise Value $1055M
Trailing P/E 23.84
Forward P/E 23.12
Trailing EV/EBITDA 12.05
Current Dividend Yield 289.54%
Dividend Growth Rate (5Y) 27.21%
Debt-to-Equity Ratio 0.00

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
Discounted Cash Flow (10Y) 30% $68.03
Discounted Cash Flow (5Y) 25% $44.99
Dividend Discount Model (Multi-Stage) 20% $37.55
Dividend Discount Model (Stable) 15% $27.53
Earnings Power Value 10% $12.17
Weighted Average 100% $190.27

Investment Conclusion

Based on our comprehensive valuation analysis, Firefly AB's intrinsic value is $190.27, which is approximately 0.7% above the current market price of $189.00.

Key investment considerations:

  • Strong projected earnings growth (9% to 9% margin)
  • Consistent cash flow generation
  • Conservative capital structure (Debt/Equity of 0.00)
  • Historical dividend growth of 27.21%

Given these factors, we believe Firefly AB is currently fairly valued with the potential for long-term appreciation based on the company's growth trajectory and financial strength.