What is GYG.L's Intrinsic value?

GYG PLC (GYG.L) Intrinsic Value Analysis

Executive Summary

As of June 16, 2025, GYG PLC's estimated intrinsic value ranges from $1403.11 to $1403.11 per share, depending on the valuation methodology applied.

Valuation Method Fair Value (USD) Implied Upside/Downside
Earnings Power Value $1403.11 +6581.5%

Is GYG PLC (GYG.L) undervalued or overvalued?

With the current market price at $21.00, 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 GYG PLC's intrinsic value, including:

  1. 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 2.9% 3.4%
Equity market risk premium 5.3% 6.3%
Adjusted beta 0.47 0.67
Cost of equity 5.5% 8.2%
Cost of debt 5.9% 7.0%
Tax rate 24.9% 33.7%
Debt/Equity ratio 1.1 1.1
After-tax WACC 4.9% 6.3%

Valuation Methods

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 $44M
Discount Rate (WACC) 6.3% - 4.9%
Enterprise Value $698M - $897M
Net Debt $19M
Equity Value $679M - $878M
Outstanding Shares 0M
Fair Value $1,460 - $1,889
Selected Fair Value $1403.11

Key Financial Metrics

Metric Value
Market Capitalization $10M
Enterprise Value $10M
Trailing P/E 0.00
Forward P/E 0.00
Trailing EV/EBITDA 5.55
Current Dividend Yield 0.00%
Dividend Growth Rate (5Y) 0.00%
Debt-to-Equity Ratio 1.10

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
Earnings Power Value 100% $140.31
Weighted Average 100% $1403.11

Investment Conclusion

Based on our comprehensive valuation analysis, GYG PLC's weighted average intrinsic value is $1403.11, which is approximately 6581.5% above the current market price of $21.00.

Key investment considerations:

  • Strong projected earnings growth (-11% to -8% margin)
  • Consistent cash flow generation

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