What is GLR.L's Intrinsic value?

Galileo Resources PLC (GLR.L) Intrinsic Value Analysis

Executive Summary

As of June 21, 2025, Galileo Resources PLC's estimated intrinsic value ranges from $1.33 to $1.33 per share, depending on the valuation methodology applied.

Valuation Method Fair Value (USD) Implied Upside/Downside
Dividend Discount Model (Stable) $1.33 +56.1%

Is Galileo Resources PLC (GLR.L) undervalued or overvalued?

With the current market price at $0.85, 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 Galileo Resources PLC's intrinsic value, including:

  1. 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 4.0% 4.5%
Equity market risk premium 6.0% 7.0%
Adjusted beta 0.52 1.44
Cost of equity 7.1% 15.1%
Cost of debt 5.0% 5.0%
Tax rate 19.0% 19.0%
Debt/Equity ratio 1 1
After-tax WACC 5.6% 9.6%

Valuation Methods

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: 0.0%
  • Stable payout ratio: 90.0%
  • Growth transition: 5 years
  • Cost of equity: 11.1%
  • Long-term growth rate: 0.5%
  • Fair value: $-0.78 (-191.6% from current price)

Stable DDM:

  • Stable payout ratio: 70% (Low) to 90% (High)
  • Cost of equity: 15.1% (Low) to 7.1% (High)
  • Long-term growth rate: 0.0% (Low) to 1.0% (High)
  • Fair value range: $1 to $2
  • Selected fair value: $1.33 (56.1% from current price)

Key Financial Metrics

Metric Value
Market Capitalization $10M
Enterprise Value $7M
Trailing P/E 6.22
Forward P/E 6.22
Trailing EV/EBITDA 0.00
Current Dividend Yield 0.00%
Dividend Growth Rate (5Y) 0.00%
Debt-to-Equity Ratio 0.89

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
Dividend Discount Model (Stable) 100% $0.20
Weighted Average 100% $1.33

Investment Conclusion

Based on our comprehensive valuation analysis, Galileo Resources PLC's weighted average intrinsic value is $1.33, which is approximately 56.1% above the current market price of $0.85.

Key investment considerations:

  • Overall financial health and market position

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