As of May 22, 2025, Hotel Chocolat Group PLC's estimated intrinsic value ranges from $152.55 to $339.05 per share, depending on the valuation methodology applied.
| Valuation Method | Fair Value (USD) | Implied Upside/Downside |
|---|---|---|
| Discounted Cash Flow (10Y) | $339.05 | -9.3% |
| Discounted Cash Flow (5Y) | $159.59 | -57.3% |
| Dividend Discount Model (Multi-Stage) | $152.55 | -59.2% |
| Earnings Power Value | $261.83 | -30.0% |
Is Hotel Chocolat Group PLC (HOTC.L) undervalued or overvalued?
With the current market price at $374.00, the stock appears to be significantly overvalued.
Intrinsic value represents the "true" worth of a company based on its fundamentals rather than market sentiment. We've employed multiple methodologies to triangulate Hotel Chocolat Group PLC'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 | 4.0% | 4.5% |
| Equity market risk premium | 6.0% | 7.0% |
| Adjusted beta | 0.39 | 0.51 |
| Cost of equity | 6.3% | 8.5% |
| Cost of debt | 7.0% | 7.0% |
| Tax rate | 9.4% | 14.9% |
| Debt/Equity ratio | 0.09 | 0.09 |
| After-tax WACC | 6.3% | 8.3% |
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 | $160 | $256M | 89.2% |
| 10-Year Growth | $339 | $503M | 81.0% |
| 5-Year EBITDA | $176 | $279M | 90.1% |
| 10-Year EBITDA | $280 | $422M | 77.3% |
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 | $29M |
| Discount Rate (WACC) | 8.3% - 6.3% |
| Enterprise Value | $343M - $451M |
| Net Debt | $37M |
| Equity Value | $306M - $414M |
| Outstanding Shares | 1M |
| Fair Value | $223 - $301 |
| Selected Fair Value | $261.83 |
| Metric | Value |
|---|---|
| Market Capitalization | $515M |
| Enterprise Value | $551M |
| Trailing P/E | 0.00 |
| Forward P/E | 0.00 |
| Trailing EV/EBITDA | 9.60 |
| Current Dividend Yield | 0.00% |
| Dividend Growth Rate (5Y) | -100.00% |
| Debt-to-Equity Ratio | 0.09 |
To determine the most reliable intrinsic value estimate, we weigh each valuation method based on:
| Valuation Method | Weight | Weighted Value |
|---|---|---|
| Discounted Cash Flow (10Y) | 35% | $101.71 |
| Discounted Cash Flow (5Y) | 29% | $39.90 |
| Dividend Discount Model (Multi-Stage) | 24% | $30.51 |
| Earnings Power Value | 12% | $26.18 |
| Weighted Average | 100% | $233.30 |
Based on our comprehensive valuation analysis, Hotel Chocolat Group PLC's weighted average intrinsic value is $233.30, which is approximately 37.6% below the current market price of $374.00.
Key investment considerations:
Given these factors, we believe Hotel Chocolat Group PLC is currently significantly overvalued with the potential for long-term appreciation based on the company's growth trajectory and financial strength.