What is JSE.L's Intrinsic value?

Jadestone Energy Inc (JSE.L) Intrinsic Value Analysis

Executive Summary

As of May 23, 2025, Jadestone Energy Inc's estimated intrinsic value ranges from $86.95 to $86.95 per share, depending on the valuation methodology applied.

Valuation Method Fair Value (USD) Implied Upside/Downside
Earnings Power Value $86.95 +324.2%

Is Jadestone Energy Inc (JSE.L) undervalued or overvalued?

With the current market price at $20.50, 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 Jadestone Energy Inc'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 4.0% 4.5%
Equity market risk premium 6.0% 7.0%
Adjusted beta 0.79 1.04
Cost of equity 8.7% 12.3%
Cost of debt 7.0% 35.6%
Tax rate 19.0% 19.0%
Debt/Equity ratio 1.27 1.27
After-tax WACC 7.0% 21.6%

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 $78M
Discount Rate (WACC) 21.6% - 7.0%
Enterprise Value $360M - $1,109M
Net Debt $94M
Equity Value $266M - $1,015M
Outstanding Shares 6M
Fair Value $48 - $183
Selected Fair Value $86.95

Key Financial Metrics

Metric Value
Market Capitalization $114M
Enterprise Value $184M
Trailing P/E 0.00
Forward P/E 0.00
Trailing EV/EBITDA 2.60
Current Dividend Yield 0.00%
Dividend Growth Rate (5Y) 0.00%
Debt-to-Equity Ratio 1.27

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% $8.70
Weighted Average 100% $86.95

Investment Conclusion

Based on our comprehensive valuation analysis, Jadestone Energy Inc's weighted average intrinsic value is $86.95, which is approximately 324.2% above the current market price of $20.50.

Key investment considerations:

  • Strong projected earnings growth (-30% to -11% margin)
  • Consistent cash flow generation

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