What is HOVD.ST's Intrinsic value?

Hovding Sverige AB (publ) (HOVD.ST) Intrinsic Value Analysis

Executive Summary

As of May 23, 2025, Hovding Sverige AB (publ)'s estimated intrinsic value ranges from $2.14 to $2.14 per share, depending on the valuation methodology applied.

Valuation Method Fair Value (USD) Implied Upside/Downside
Earnings Power Value $2.14 -89.8%

Is Hovding Sverige AB (publ) (HOVD.ST) undervalued or overvalued?

With the current market price at $21.00, the stock appears to be significantly overvalued.

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 Hovding Sverige AB (publ)'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 2.3% 2.8%
Equity market risk premium 4.7% 5.7%
Adjusted beta 0.84 1.01
Cost of equity 6.3% 9.1%
Cost of debt 7.0% 7.0%
Tax rate 21.4% 21.6%
Debt/Equity ratio 1 1
After-tax WACC 5.9% 7.3%

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 $1M
Discount Rate (WACC) 7.3% - 5.9%
Enterprise Value $7M - $9M
Net Debt $(51)M
Equity Value $58M - $60M
Outstanding Shares 28M
Fair Value $2 - $2
Selected Fair Value $2.14

Key Financial Metrics

Metric Value
Market Capitalization $582M
Enterprise Value $531M
Trailing P/E 0.00
Forward P/E 0.00
Trailing EV/EBITDA 7.30
Current Dividend Yield 0.00%
Dividend Growth Rate (5Y) 0.00%
Debt-to-Equity Ratio 0.96

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% $0.21
Weighted Average 100% $2.14

Investment Conclusion

Based on our comprehensive valuation analysis, Hovding Sverige AB (publ)'s weighted average intrinsic value is $2.14, which is approximately 89.8% below the current market price of $21.00.

Key investment considerations:

  • Strong projected earnings growth (-17% to 1% margin)
  • Consistent cash flow generation

Given these factors, we believe Hovding Sverige AB (publ) is currently significantly overvalued with the potential for long-term appreciation based on the company's growth trajectory and financial strength.