Inapa Investimentos Participacoes e Gestao SA (INA.LS) Intrinsic Value Analysis

Executive Summary

As of June 9, 2025, Inapa Investimentos Participacoes e Gestao SA's estimated intrinsic value ranges from $0.00 to $0.72 per share, depending on the valuation methodology applied.

Valuation Method	Fair Value (USD)	Implied Upside/Downside
Discounted Cash Flow (10Y)	$0.00	+1762.0%
Discounted Cash Flow (5Y)	$0.00	+551.5%
Earnings Power Value	$0.72	+360051.0%

Is Inapa Investimentos Participacoes e Gestao SA (INA.LS) undervalued or overvalued?

With the current market price at $0.00, 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 Inapa Investimentos Participacoes e Gestao SA'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	2.9%	3.4%
Equity market risk premium	6.9%	7.8%
Adjusted beta	8.52	24.35
Cost of equity	61.2%	195.0%
Cost of debt	5.0%	5.0%
Tax rate	15.8%	30.4%
Debt/Equity ratio	301.42	301.42
After-tax WACC	4.4%	4.1%

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: 5-year DCF and 10-year DCF
• Terminal Growth Rate: 0.0% (range: 3.0% - 5.0%)
• Discount Rate: 4.3% (range: 0.0% - 9.3%)

Key Projections:

• Revenue growth from $995 (FY12-2023) to $1,424 (FY12-2033)
• Net profit margin expansion from -1% to -1%
• Capital expenditures maintained at approximately 0% of revenue

DCF Model	Fair Value	Enterprise Value	% from Terminal Value
5-Year Growth	$0	$211M	90.6%
10-Year Growth	$0	$220M	77.9%
5-Year EBITDA	$(1,234)	$73M	72.8%
10-Year EBITDA	$(1,234)	$102M	52.0%

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	$122M
Discount Rate (WACC)	4.1% - 4.4%
Enterprise Value	$2,956M - $2,764M
Net Debt	$207M
Equity Value	$2,749M - $2,557M
Outstanding Shares	3,684M
Fair Value	$1 - $1
Selected Fair Value	$0.72

Key Financial Metrics

Metric	Value
Market Capitalization	$1M
Enterprise Value	$207M
Trailing P/E	0.00
Forward P/E	0.00
Trailing EV/EBITDA	6.20
Current Dividend Yield	17102.90%
Dividend Growth Rate (5Y)	0.00%
Debt-to-Equity Ratio	301.42

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)	46%	$0.00
Discounted Cash Flow (5Y)	38%	$0.00
Earnings Power Value	15%	$0.07
Weighted Average	100%	$0.11

Investment Conclusion

Based on our comprehensive valuation analysis, Inapa Investimentos Participacoes e Gestao SA's weighted average intrinsic value is $0.11, which is approximately 56417.8% above the current market price of $0.00.

Key investment considerations:

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

Given these factors, we believe Inapa Investimentos Participacoes e Gestao SA is currently significantly undervalued with the potential for long-term appreciation based on the company's growth trajectory and financial strength.