As of May 27, 2025, Kainos Group PLC's estimated intrinsic value ranges from $363.24 to $891.16 per share, depending on the valuation methodology applied.
| Valuation Method | Fair Value (USD) | Implied Upside/Downside |
|---|---|---|
| Discounted Cash Flow (10Y) | $630.79 | -12.8% |
| Discounted Cash Flow (5Y) | $450.77 | -37.7% |
| Dividend Discount Model (Multi-Stage) | $550.63 | -23.8% |
| Dividend Discount Model (Stable) | $363.24 | -49.8% |
| Earnings Power Value | $891.16 | +23.3% |
Is Kainos Group PLC (KNOS.L) undervalued or overvalued?
With the current market price at $723.00, the stock appears to be significantly overvalued.
Intrinsic value represents the "true" worth of a company based on its fundamentals rather than market sentiment. We've employed multiple methodologies to triangulate Kainos Group PLC'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 | 4.0% | 4.5% |
| Equity market risk premium | 6.0% | 7.0% |
| Adjusted beta | 0.67 | 0.71 |
| Cost of equity | 8.0% | 10.0% |
| Cost of debt | 4.6% | 9.5% |
| Tax rate | 22.9% | 23.9% |
| Debt/Equity ratio | 0.01 | 0.01 |
| After-tax WACC | 8.0% | 10.0% |
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 | $451 | $444M | 72.0% |
| 10-Year Growth | $631 | $671M | 58.7% |
| 5-Year EBITDA | $512 | $521M | 76.1% |
| 10-Year EBITDA | $632 | $672M | 58.8% |
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 | $89M |
| Discount Rate (WACC) | 10.0% - 8.0% |
| Enterprise Value | $889M - $1,107M |
| Net Debt | $(123)M |
| Equity Value | $1,012M - $1,230M |
| Outstanding Shares | 1M |
| Fair Value | $804 - $978 |
| Selected Fair Value | $891.16 |
| Metric | Value |
|---|---|
| Market Capitalization | $909M |
| Enterprise Value | $787M |
| Trailing P/E | 25.58 |
| Forward P/E | 22.81 |
| Trailing EV/EBITDA | 8.40 |
| Current Dividend Yield | 393.06% |
| Dividend Growth Rate (5Y) | 22.21% |
| Debt-to-Equity Ratio | 0.01 |
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% | $189.24 |
| Discounted Cash Flow (5Y) | 25% | $112.69 |
| Dividend Discount Model (Multi-Stage) | 20% | $110.13 |
| Dividend Discount Model (Stable) | 15% | $54.49 |
| Earnings Power Value | 10% | $89.12 |
| Weighted Average | 100% | $555.66 |
Based on our comprehensive valuation analysis, Kainos Group PLC's weighted average intrinsic value is $555.66, which is approximately 23.1% below the current market price of $723.00.
Key investment considerations:
Given these factors, we believe Kainos Group PLC is currently significantly overvalued with the potential for long-term appreciation based on the company's growth trajectory and financial strength.