What is GRN.TO's Intrinsic value?

Greenlane Renewables Inc (GRN.TO) Intrinsic Value Analysis

Executive Summary

As of May 25, 2025, Greenlane Renewables Inc's estimated intrinsic value ranges from $0.36 to $0.36 per share, depending on the valuation methodology applied.

Valuation Method Fair Value (USD) Implied Upside/Downside
Dividend Discount Model (Multi-Stage) $0.36 +355.9%

Is Greenlane Renewables Inc (GRN.TO) undervalued or overvalued?

With the current market price at $0.08, 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 Greenlane Renewables Inc'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 3.2% 3.7%
Equity market risk premium 5.1% 6.1%
Adjusted beta 0.89 1.1
Cost of equity 7.7% 10.9%
Cost of debt 7.0% 8.0%
Tax rate 3.2% 3.5%
Debt/Equity ratio 0.17 0.17
After-tax WACC 7.6% 10.4%

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: 9.3%
  • Long-term growth rate: 3.5%
  • Fair value: $0.36 (355.9% from current price)

Stable DDM:

  • Stable payout ratio: 70% (Low) to 90% (High)
  • Cost of equity: 10.9% (Low) to 7.7% (High)
  • Long-term growth rate: 2.5% (Low) to 4.5% (High)
  • Fair value range: $(0) to $(1)
  • Selected fair value: $-0.34 (-520.1% from current price)

Key Financial Metrics

Metric Value
Market Capitalization $13M
Enterprise Value $-2M
Trailing P/E 0.00
Forward P/E 155.29
Trailing EV/EBITDA 13.50
Current Dividend Yield 0.00%
Dividend Growth Rate (5Y) 0.00%
Debt-to-Equity Ratio 0.17

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 (Multi-Stage) 100% $0.07
Weighted Average 100% $0.36

Investment Conclusion

Based on our comprehensive valuation analysis, Greenlane Renewables Inc's weighted average intrinsic value is $0.36, which is approximately 355.9% above the current market price of $0.08.

Key investment considerations:

  • Strong projected earnings growth (-3% to 5% margin)
  • Conservative capital structure (Debt/Equity of 0.17)

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