As of May 27, 2025, Gear4music Holdings PLC's estimated intrinsic value ranges from $47.40 to $156.35 per share, depending on the valuation methodology applied.
| Valuation Method | Fair Value (USD) | Implied Upside/Downside |
|---|---|---|
| Discounted Cash Flow (10Y) | $156.35 | +6.0% |
| Discounted Cash Flow (5Y) | $121.14 | -17.9% |
| Dividend Discount Model (Multi-Stage) | $47.40 | -67.9% |
| Dividend Discount Model (Stable) | $129.93 | -11.9% |
| Earnings Power Value | $66.89 | -54.6% |
Is Gear4music Holdings PLC (G4M.L) undervalued or overvalued?
With the current market price at $147.50, 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 Gear4music Holdings 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 | 0.4 | 0.48 |
| Cost of equity | 6.4% | 8.3% |
| Cost of debt | 5.5% | 9.2% |
| Tax rate | 15.0% | 19.8% |
| Debt/Equity ratio | 0.64 | 0.64 |
| After-tax WACC | 5.7% | 8.0% |
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 | $121 | $51M | 86.7% |
| 10-Year Growth | $156 | $59M | 76.9% |
| 5-Year EBITDA | $70 | $39M | 82.8% |
| 10-Year EBITDA | $79 | $41M | 67.1% |
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 | $3M |
| Discount Rate (WACC) | 8.0% - 5.7% |
| Enterprise Value | $32M - $45M |
| Net Debt | $23M |
| Equity Value | $9M - $21M |
| Outstanding Shares | 0M |
| Fair Value | $39 - $94 |
| Selected Fair Value | $66.89 |
| Metric | Value |
|---|---|
| Market Capitalization | $34M |
| Enterprise Value | $57M |
| Trailing P/E | 34.18 |
| Forward P/E | 62.48 |
| Trailing EV/EBITDA | 5.05 |
| Current Dividend Yield | 62.96% |
| Dividend Growth Rate (5Y) | 0.00% |
| Debt-to-Equity Ratio | 0.64 |
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% | $46.91 |
| Discounted Cash Flow (5Y) | 25% | $30.28 |
| Dividend Discount Model (Multi-Stage) | 20% | $9.48 |
| Dividend Discount Model (Stable) | 15% | $19.49 |
| Earnings Power Value | 10% | $6.69 |
| Weighted Average | 100% | $112.85 |
Based on our comprehensive valuation analysis, Gear4music Holdings PLC's weighted average intrinsic value is $112.85, which is approximately 23.5% below the current market price of $147.50.
Key investment considerations:
Given these factors, we believe Gear4music Holdings PLC is currently significantly overvalued with the potential for long-term appreciation based on the company's growth trajectory and financial strength.