As of May 23, 2025, Gran Colombia Gold Corp's estimated intrinsic value ranges from $7.18 to $24.77 per share, depending on the valuation methodology applied.
| Valuation Method | Fair Value (USD) | Implied Upside/Downside |
|---|---|---|
| Discounted Cash Flow (10Y) | $24.77 | +474.7% |
| Discounted Cash Flow (5Y) | $23.17 | +437.6% |
| Dividend Discount Model (Multi-Stage) | $14.73 | +241.7% |
| Dividend Discount Model (Stable) | $7.18 | +66.6% |
| Earnings Power Value | $14.28 | +231.4% |
Is Gran Colombia Gold Corp (GCM.TO) undervalued or overvalued?
With the current market price at $4.31, the stock appears to be significantly 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 Gran Colombia Gold 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 | 3.6% | 4.1% |
| Equity market risk premium | 5.5% | 6.5% |
| Adjusted beta | 1.45 | 1.48 |
| Cost of equity | 11.5% | 14.2% |
| Cost of debt | 4.4% | 6.2% |
| Tax rate | 25.9% | 26.5% |
| Debt/Equity ratio | 1.03 | 1.03 |
| After-tax WACC | 7.3% | 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 | $17 | $1,707M | 69.8% |
| 10-Year Growth | $18 | $1,821M | 49.0% |
| 5-Year EBITDA | $15 | $1,481M | 65.2% |
| 10-Year EBITDA | $16 | $1,646M | 43.6% |
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 | $88M |
| Discount Rate (WACC) | 9.3% - 7.3% |
| Enterprise Value | $945M - $1,200M |
| Net Debt | $52M |
| Equity Value | $893M - $1,148M |
| Outstanding Shares | 98M |
| Fair Value | $9 - $12 |
| Selected Fair Value | $14.28 |
| Metric | Value |
|---|---|
| Market Capitalization | $421M |
| Enterprise Value | $493M |
| Trailing P/E | 3.96 |
| Forward P/E | 1.73 |
| Trailing EV/EBITDA | 5.40 |
| Current Dividend Yield | 455.01% |
| Dividend Growth Rate (5Y) | 0.00% |
| Debt-to-Equity Ratio | 1.03 |
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% | $7.43 |
| Discounted Cash Flow (5Y) | 25% | $5.79 |
| Dividend Discount Model (Multi-Stage) | 20% | $2.95 |
| Dividend Discount Model (Stable) | 15% | $1.08 |
| Earnings Power Value | 10% | $1.43 |
| Weighted Average | 100% | $18.67 |
Based on our comprehensive valuation analysis, Gran Colombia Gold Corp's weighted average intrinsic value is $18.67, which is approximately 333.3% above the current market price of $4.31.
Key investment considerations:
Given these factors, we believe Gran Colombia Gold Corp is currently significantly undervalued with the potential for long-term appreciation based on the company's growth trajectory and financial strength.