Ianthus Capital Holdings Inc (IAN.CN) Intrinsic Value Analysis

Executive Summary

As of May 24, 2025, Ianthus Capital Holdings Inc's estimated intrinsic value ranges from $0.01 to $0.03 per share, depending on the valuation methodology applied.

Valuation Method	Fair Value (USD)	Implied Upside/Downside
Discounted Cash Flow (10Y)	$0.01	+191.8%
Earnings Power Value	$0.03	+542.9%

Is Ianthus Capital Holdings Inc (IAN.CN) undervalued or overvalued?

With the current market price at $0.01, 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 Ianthus Capital Holdings Inc's intrinsic value, including:

1. Discounted Cash Flow (DCF): Values the company based on projected future cash flows
2. 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	3.2%	3.7%
Equity market risk premium	5.1%	6.1%
Adjusted beta	0.42	0.88
Cost of equity	5.3%	9.5%
Cost of debt	4.0%	7.0%
Tax rate	25.9%	45.4%
Debt/Equity ratio	7.56	7.56
After-tax WACC	3.2%	4.5%

Valuation Methods

1. Discounted Cash Flow (DCF) Valuation

Our DCF model projects cash flows over 5-year and 10-year horizons, with the following key assumptions:

• Forecast Period: 10-year DCF
• Terminal Growth Rate: 0.0% (range: 3.0% - 5.0%)
• Discount Rate: 3.9% (range: 0.0% - 9.3%)

Key Projections:

• Revenue growth from $168 (FY12-2024) to $292 (FY12-2034)
• Net profit margin expansion from -5% to -9%
• Capital expenditures maintained at approximately 6% of revenue

DCF Model	Fair Value	Enterprise Value	% from Terminal Value
5-Year Growth	$(1,234)	$152M	88.5%
10-Year Growth	$0	$234M	80.8%
5-Year EBITDA	$(1,234)	$103M	83.0%
10-Year EBITDA	$(1,234)	$152M	70.4%

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	$12M
Discount Rate (WACC)	4.5% - 3.2%
Enterprise Value	$267M - $370M
Net Debt	$164M
Equity Value	$103M - $207M
Outstanding Shares	6,736M
Fair Value	$0 - $0
Selected Fair Value	$0.03

Key Financial Metrics

Metric	Value
Market Capitalization	$34M
Enterprise Value	$262M
Trailing P/E	0.00
Forward P/E	0.00
Trailing EV/EBITDA	15.75
Current Dividend Yield	62.96%
Dividend Growth Rate (5Y)	0.00%
Debt-to-Equity Ratio	7.56

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
Discounted Cash Flow (10Y)	75%	$0.00
Earnings Power Value	25%	$0.00
Weighted Average	100%	$0.02

Investment Conclusion

Based on our comprehensive valuation analysis, Ianthus Capital Holdings Inc's weighted average intrinsic value is $0.02, which is approximately 279.6% above the current market price of $0.01.

Key investment considerations:

• Strong projected earnings growth (-5% to -9% margin)
• Consistent cash flow generation

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