What is HOLL.CN's Intrinsic value?

Hollister Biosciences Inc (HOLL.CN) Intrinsic Value Analysis

Executive Summary

As of May 25, 2025, Hollister Biosciences Inc's estimated intrinsic value ranges from $0.22 to $0.22 per share, depending on the valuation methodology applied.

Valuation Method Fair Value (USD) Implied Upside/Downside
Dividend Discount Model (Stable) $0.22 +53.8%

Is Hollister Biosciences Inc (HOLL.CN) undervalued or overvalued?

With the current market price at $0.14, 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 Hollister Biosciences 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 3.4% 3.9%
Equity market risk premium 4.7% 5.7%
Adjusted beta 0.72 0.98
Cost of equity 6.8% 10.0%
Cost of debt 4.0% 4.5%
Tax rate 26.5% 26.5%
Debt/Equity ratio 0.14 0.14
After-tax WACC 6.3% 9.2%

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: 8.4%
  • Long-term growth rate: 2.0%
  • Fair value: $-0.04 (-124.7% from current price)

Stable DDM:

  • Stable payout ratio: 70% (Low) to 90% (High)
  • Cost of equity: 10.0% (Low) to 6.8% (High)
  • Long-term growth rate: 1.0% (Low) to 3.0% (High)
  • Fair value range: $0 to $0
  • Selected fair value: $0.22 (53.8% from current price)

Key Financial Metrics

Metric Value
Market Capitalization $39M
Enterprise Value $35M
Trailing P/E 9.41
Forward P/E 9.41
Trailing EV/EBITDA 42.45
Current Dividend Yield 0.00%
Dividend Growth Rate (5Y) 0.00%
Debt-to-Equity Ratio 0.14

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% $0.03
Weighted Average 100% $0.22

Investment Conclusion

Based on our comprehensive valuation analysis, Hollister Biosciences Inc's weighted average intrinsic value is $0.22, which is approximately 53.8% above the current market price of $0.14.

Key investment considerations:

  • Strong projected earnings growth (-12% to -1% margin)
  • Consistent cash flow generation
  • Conservative capital structure (Debt/Equity of 0.14)

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