What is FLOW.AS's Intrinsic value?

Flow Traders NV (FLOW.AS) Intrinsic Value Analysis

Executive Summary

As of June 21, 2025, Flow Traders NV's estimated intrinsic value ranges from $27.43 to $80.89 per share, depending on the valuation methodology applied.

Valuation Method Fair Value (USD) Implied Upside/Downside
Discounted Cash Flow (10Y) $80.89 +176.5%
Discounted Cash Flow (5Y) $73.20 +150.2%
Dividend Discount Model (Multi-Stage) $27.43 -6.2%
Dividend Discount Model (Stable) $50.53 +72.7%

Is Flow Traders NV (FLOW.AS) undervalued or overvalued?

With the current market price at $29.26, the stock appears to be significantly undervalued.

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 Flow Traders NV'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

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 2.6% 3.1%
Equity market risk premium 5.1% 6.1%
Adjusted beta 0.97 1.65
Cost of equity 7.5% 13.6%
Cost of debt 4.0% 7.0%
Tax rate 18.9% 19.7%
Debt/Equity ratio 1.48 1.48
After-tax WACC 5.0% 8.8%

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: 6.9% (range: 0.0% - 9.3%)

Key Projections:

  • Revenue growth from $479 (FY12-2024) to $714 (FY12-2034)
  • Net profit margin expansion from 33% to 33%
  • Capital expenditures maintained at approximately 1% of revenue
DCF Model Fair Value Enterprise Value % from Terminal Value
5-Year Growth $73 $5,296M 50.6%
10-Year Growth $81 $5,648M 39.0%
5-Year EBITDA $36 $3,596M 27.3%
10-Year EBITDA $51 $4,280M 19.5%

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: 2.7%
  • Stable payout ratio: 90.0%
  • Growth transition: 5 years
  • Cost of equity: 10.6%
  • Long-term growth rate: 0.5%
  • Fair value: $27.43 (-6.2% from current price)

Stable DDM:

  • Stable payout ratio: 70% (Low) to 90% (High)
  • Cost of equity: 13.6% (Low) to 7.5% (High)
  • Long-term growth rate: 0.0% (Low) to 1.0% (High)
  • Fair value range: $27 to $74
  • Selected fair value: $50.53 (72.7% from current price)

Key Financial Metrics

Metric Value
Market Capitalization $1336M
Enterprise Value $3290M
Trailing P/E 5.50
Forward P/E 9.09
Trailing EV/EBITDA 5.80
Current Dividend Yield 48.89%
Dividend Growth Rate (5Y) -57.86%
Debt-to-Equity Ratio 1.48

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) 33% $24.27
Discounted Cash Flow (5Y) 28% $18.30
Dividend Discount Model (Multi-Stage) 22% $5.49
Dividend Discount Model (Stable) 17% $7.58
Weighted Average 100% $61.82

Investment Conclusion

Based on our comprehensive valuation analysis, Flow Traders NV's weighted average intrinsic value is $61.82, which is approximately 111.3% above the current market price of $29.26.

Key investment considerations:

  • Strong projected earnings growth (33% to 33% margin)
  • Consistent cash flow generation

Given these factors, we believe Flow Traders NV is currently significantly undervalued with the potential for long-term appreciation based on the company's growth trajectory and financial strength.