Globalworth Real Estate Investments Ltd (GWI.L) Intrinsic Value Analysis

Executive Summary

As of June 7, 2025, Globalworth Real Estate Investments Ltd's estimated intrinsic value ranges from $1.41 to $4.12 per share, depending on the valuation methodology applied.

Valuation Method	Fair Value (USD)	Implied Upside/Downside
Discounted Cash Flow (10Y)	$4.12	+70.9%
Discounted Cash Flow (5Y)	$3.36	+39.6%
Earnings Power Value	$1.41	-41.5%

Is Globalworth Real Estate Investments Ltd (GWI.L) undervalued or overvalued?

With the current market price at $2.41, 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 Globalworth Real Estate Investments Ltd's intrinsic value, including:

1. Discounted Cash Flow (DCF): Values the company based on projected future cash flows
2. Earnings Power Value (EPV): Values the company based on its current earnings power, assuming no growth

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	0.74	0.91
Cost of equity	8.4%	11.3%
Cost of debt	4.0%	7.6%
Tax rate	19.1%	31.5%
Debt/Equity ratio	1.88	1.88
After-tax WACC	5.0%	7.3%

Valuation Methods

1. Discounted Cash Flow (DCF) Valuation

Our DCF model projects cash flows over 5-year and 10-year horizons, with the following key assumptions:

• Forecast Period: 5-year DCF and 10-year DCF
• Terminal Growth Rate: 0.0% (range: 3.0% - 5.0%)
• Discount Rate: 6.2% (range: 0.0% - 9.3%)

Key Projections:

• Revenue growth from $238 (FY12-2024) to $327 (FY12-2034)
• Net profit margin expansion from -34% to -27%
• Capital expenditures maintained at approximately 0% of revenue

DCF Model	Fair Value	Enterprise Value	% from Terminal Value
5-Year Growth	$3	$2,200M	77.5%
10-Year Growth	$4	$2,419M	61.8%
5-Year EBITDA	$1	$1,500M	67.0%
10-Year EBITDA	$2	$1,804M	48.8%

3. Earnings Power Value (EPV)

EPV assesses a company's value based on its current normalized earnings power, assuming no growth.

EPV Component	Value
Normalized Earnings	$97M
Discount Rate (WACC)	7.3% - 5.0%
Enterprise Value	$1,331M - $1,934M
Net Debt	$1,223M
Equity Value	$108M - $711M
Outstanding Shares	291M
Fair Value	$0 - $2
Selected Fair Value	$1.41

Key Financial Metrics

Metric	Value
Market Capitalization	$700M
Enterprise Value	$1923M
Trailing P/E	0.00
Forward P/E	0.00
Trailing EV/EBITDA	14.05
Current Dividend Yield	11.67%
Dividend Growth Rate (5Y)	-70.53%
Debt-to-Equity Ratio	1.88

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
Discounted Cash Flow (10Y)	46%	$1.24
Discounted Cash Flow (5Y)	38%	$0.84
Earnings Power Value	15%	$0.14
Weighted Average	100%	$3.41

Investment Conclusion

Based on our comprehensive valuation analysis, Globalworth Real Estate Investments Ltd's weighted average intrinsic value is $3.41, which is approximately 41.6% above the current market price of $2.41.

Key investment considerations:

• Strong projected earnings growth (-34% to -27% margin)
• Consistent cash flow generation

Given these factors, we believe Globalworth Real Estate Investments Ltd is currently significantly undervalued with the potential for long-term appreciation based on the company's growth trajectory and financial strength.