What is GLR.L's Intrinsic value?

Galileo Resources PLC (GLR.L) Intrinsic Value Analysis

Executive Summary

As of May 23, 2025, Galileo Resources PLC's estimated intrinsic value ranges from $2.51 to $2.51 per share, depending on the valuation methodology applied.

Valuation Method Fair Value (USD) Implied Upside/Downside
Dividend Discount Model (Stable) $2.51 +164.1%

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

With the current market price at $0.95, 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 -0.05 0.5
Cost of equity 3.7% 8.5%
Cost of debt 5.0% 5.0%
Tax rate 19.0% 19.0%
Debt/Equity ratio 1 1
After-tax WACC 3.9% 6.3%

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: 6.1%
  • Long-term growth rate: 4.0%
  • Fair value: $-4.07 (-528.2% from current price)

Stable DDM:

  • Stable payout ratio: 70% (Low) to 90% (High)
  • Cost of equity: 8.5% (Low) to 3.7% (High)
  • Long-term growth rate: 3.0% (Low) to 5.0% (High)
  • Fair value range: $(1) to $6
  • Selected fair value: $2.51 (164.1% from current price)

Key Financial Metrics

Metric Value
Market Capitalization $11M
Enterprise Value $11M
Trailing P/E 0.00
Forward P/E 0.00
Trailing EV/EBITDA 0.00
Current Dividend Yield 0.00%
Dividend Growth Rate (5Y) 0.00%
Debt-to-Equity Ratio 0.84

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% $0.38
Weighted Average 100% $2.51

Investment Conclusion

Based on our comprehensive valuation analysis, Galileo Resources PLC's weighted average intrinsic value is $2.51, which is approximately 164.1% above the current market price of $0.95.

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.