As of May 23, 2025, Kirkland Lake Gold Ltd's estimated intrinsic value ranges from $29.19 to $71.04 per share, depending on the valuation methodology applied.
| Valuation Method | Fair Value (USD) | Implied Upside/Downside |
|---|---|---|
| Discounted Cash Flow (10Y) | $71.04 | +42.9% |
| Discounted Cash Flow (5Y) | $65.12 | +31.0% |
| Dividend Discount Model (Multi-Stage) | $47.95 | -3.5% |
| Dividend Discount Model (Stable) | $59.57 | +19.8% |
| Earnings Power Value | $29.19 | -41.3% |
Is Kirkland Lake Gold Ltd (KL.TO) undervalued or overvalued?
With the current market price at $49.71, the stock appears to be moderately undervalued.
Intrinsic value represents the "true" worth of a company based on its fundamentals rather than market sentiment. We've employed multiple methodologies to triangulate Kirkland Lake Gold Ltd's intrinsic value, including:
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 | 3.4% | 3.9% |
| Equity market risk premium | 4.7% | 5.7% |
| Adjusted beta | 0.89 | 0.96 |
| Cost of equity | 7.6% | 9.9% |
| Cost of debt | 7.0% | 8.7% |
| Tax rate | 30.3% | 31.0% |
| Debt/Equity ratio | 0 | 0 |
| After-tax WACC | 7.6% | 9.9% |
Our DCF model projects cash flows over 5-year and 10-year horizons, with the following key assumptions:
| DCF Model | Fair Value | Enterprise Value | % from Terminal Value |
|---|---|---|---|
| 5-Year Growth | $51 | $12,619M | 75.9% |
| 10-Year Growth | $56 | $13,840M | 56.1% |
| 5-Year EBITDA | $40 | $9,670M | 68.5% |
| 10-Year EBITDA | $47 | $11,475M | 47.1% |
The DDM values a company based on its expected future dividend payments. We used two approaches:
EPV assesses a company's value based on its current normalized earnings power, assuming no growth.
| EPV Component | Value |
|---|---|
| Normalized Earnings | $447M |
| Discount Rate (WACC) | 9.9% - 7.6% |
| Enterprise Value | $4,535M - $5,896M |
| Net Debt | $(800)M |
| Equity Value | $5,335M - $6,695M |
| Outstanding Shares | 264M |
| Fair Value | $20 - $25 |
| Selected Fair Value | $29.19 |
| Metric | Value |
|---|---|
| Market Capitalization | $13108M |
| Enterprise Value | $11992M |
| Trailing P/E | 10.51 |
| Forward P/E | 11.52 |
| Trailing EV/EBITDA | 4.80 |
| Current Dividend Yield | 180.18% |
| Dividend Growth Rate (5Y) | 160.55% |
| Debt-to-Equity Ratio | 0.00 |
To determine the most reliable intrinsic value estimate, we weigh each valuation method based on:
| Valuation Method | Weight | Weighted Value |
|---|---|---|
| Discounted Cash Flow (10Y) | 30% | $21.31 |
| Discounted Cash Flow (5Y) | 25% | $16.28 |
| Dividend Discount Model (Multi-Stage) | 20% | $9.59 |
| Dividend Discount Model (Stable) | 15% | $8.94 |
| Earnings Power Value | 10% | $2.92 |
| Weighted Average | 100% | $59.04 |
Based on our comprehensive valuation analysis, Kirkland Lake Gold Ltd's weighted average intrinsic value is $59.04, which is approximately 18.8% above the current market price of $49.71.
Key investment considerations:
Given these factors, we believe Kirkland Lake Gold Ltd is currently moderately undervalued with the potential for long-term appreciation based on the company's growth trajectory and financial strength.