As of June 8, 2025, Hoegh LNG Partners LP's estimated intrinsic value ranges from $9.94 to $20.18 per share, depending on the valuation methodology applied.
| Valuation Method | Fair Value (USD) | Implied Upside/Downside |
|---|---|---|
| Discounted Cash Flow (10Y) | $17.57 | +90.1% |
| Discounted Cash Flow (5Y) | $13.19 | +42.8% |
| Dividend Discount Model (Multi-Stage) | $12.57 | +36.0% |
| Dividend Discount Model (Stable) | $9.94 | +7.6% |
| Earnings Power Value | $20.18 | +118.4% |
Is Hoegh LNG Partners LP (HMLP) undervalued or overvalued?
With the current market price at $9.24, the stock appears to be significantly undervalued.
Intrinsic value represents the "true" worth of a company based on its fundamentals rather than market sentiment. We've employed multiple methodologies to triangulate Hoegh LNG Partners LP's intrinsic value, including:
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 | 4.2% | 5.2% |
| Adjusted beta | 2.29 | 2.39 |
| Cost of equity | 12.9% | 16.7% |
| Cost of debt | 4.0% | 5.5% |
| Tax rate | 11.1% | 12.1% |
| Debt/Equity ratio | 1.34 | 1.34 |
| After-tax WACC | 7.5% | 9.9% |
Our DCF model projects cash flows over 5-year and 10-year horizons, with the following key assumptions:
| DCF Model | Fair Value | Enterprise Value | % from Terminal Value |
|---|---|---|---|
| 5-Year Growth | $13 | $797M | 70.5% |
| 10-Year Growth | $18 | $943M | 50.6% |
| 5-Year EBITDA | $20 | $676M | 65.2% |
| 10-Year EBITDA | $25 | $830M | 43.8% |
The DDM values a company based on its expected future dividend payments. We used two approaches:
EPV assesses a company's value based on its current normalized earnings power, assuming no growth.
| EPV Component | Value |
|---|---|
| Normalized Earnings | $88M |
| Discount Rate (WACC) | 9.9% - 7.5% |
| Enterprise Value | $891M - $1,171M |
| Net Debt | $357M |
| Equity Value | $534M - $813M |
| Outstanding Shares | 33M |
| Fair Value | $16 - $24 |
| Selected Fair Value | $20.18 |
| Metric | Value |
|---|---|
| Market Capitalization | $308M |
| Enterprise Value | $308M |
| Trailing P/E | 0.00 |
| Forward P/E | 4.68 |
| Trailing EV/EBITDA | 6.00 |
| Current Dividend Yield | 43.38% |
| Dividend Growth Rate (5Y) | -35.60% |
| Debt-to-Equity Ratio | 1.34 |
To determine the most reliable intrinsic value estimate, we weigh each valuation method based on:
| Valuation Method | Weight | Weighted Value |
|---|---|---|
| Discounted Cash Flow (10Y) | 30% | $5.27 |
| Discounted Cash Flow (5Y) | 25% | $3.30 |
| Dividend Discount Model (Multi-Stage) | 20% | $2.51 |
| Dividend Discount Model (Stable) | 15% | $1.49 |
| Earnings Power Value | 10% | $2.02 |
| Weighted Average | 100% | $14.59 |
Based on our comprehensive valuation analysis, Hoegh LNG Partners LP's weighted average intrinsic value is $14.59, which is approximately 57.9% above the current market price of $9.24.
Key investment considerations:
Given these factors, we believe Hoegh LNG Partners LP is currently significantly undervalued with the potential for long-term appreciation based on the company's growth trajectory and financial strength.