What is JG's Intrinsic value?

Aurora Mobile Ltd (JG) Intrinsic Value Analysis

Executive Summary

As of June 2, 2025, Aurora Mobile Ltd's estimated intrinsic value ranges from $0.66 to $0.82 per share, depending on the valuation methodology applied.

Valuation Method Fair Value (USD) Implied Upside/Downside
Discounted Cash Flow (10Y) $0.66 -94.3%
Dividend Discount Model (Multi-Stage) $0.82 -92.9%

Is Aurora Mobile Ltd (JG) undervalued or overvalued?

With the current market price at $11.51, 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 Aurora Mobile Ltd's intrinsic value, including:

  1. Discounted Cash Flow (DCF): Values the company based on projected future cash flows
  2. 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 3.9% 4.4%
Equity market risk premium 4.6% 5.6%
Adjusted beta 0.93 1.2
Cost of equity 8.2% 11.6%
Cost of debt 4.5% 4.5%
Tax rate 0.3% 0.9%
Debt/Equity ratio 0.01 0.01
After-tax WACC 8.1% 11.5%

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: 9.8% (range: 0.0% - 9.3%)

Key Projections:

  • Revenue growth from $316 (FY12-2024) to $815 (FY12-2034)
  • Net profit margin expansion from -2% to 1%
  • Capital expenditures maintained at approximately 3% of revenue
DCF Model Fair Value Enterprise Value % from Terminal Value
5-Year Growth $(1,234) $(30)M 41.1%
10-Year Growth $5 $30M 176.2%
5-Year EBITDA $11 $64M 165.9%
10-Year EBITDA $15 $88M 126.2%

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: 9.9%
  • Long-term growth rate: 3.5%
  • Fair value: $0.82 (-92.9% from current price)

Stable DDM:

  • Stable payout ratio: 70% (Low) to 90% (High)
  • Cost of equity: 11.6% (Low) to 8.2% (High)
  • Long-term growth rate: 2.5% (Low) to 4.5% (High)
  • Fair value range: $(9) to $(30)
  • Selected fair value: $-2.76 (-124.0% from current price)

Key Financial Metrics

Metric Value
Market Capitalization $66M
Enterprise Value $66M
Trailing P/E 0.00
Forward P/E 0.00
Trailing EV/EBITDA 10.20
Current Dividend Yield 0.00%
Dividend Growth Rate (5Y) 0.00%
Debt-to-Equity Ratio 0.01

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) 60% $0.20
Dividend Discount Model (Multi-Stage) 40% $0.16
Weighted Average 100% $0.72

Investment Conclusion

Based on our comprehensive valuation analysis, Aurora Mobile Ltd's weighted average intrinsic value is $0.72, which is approximately 93.7% below the current market price of $11.51.

Key investment considerations:

  • Strong projected earnings growth (-2% to 1% margin)
  • Consistent cash flow generation
  • Conservative capital structure (Debt/Equity of 0.01)

Given these factors, we believe Aurora Mobile Ltd is currently significantly overvalued with the potential for long-term appreciation based on the company's growth trajectory and financial strength.