What is LAMDA.AT's Intrinsic value?

Lamda Development SA (LAMDA.AT) Intrinsic Value Analysis

Executive Summary

As of June 15, 2025, Lamda Development SA's estimated intrinsic value ranges from $1.40 to $5.76 per share, depending on the valuation methodology applied.

Valuation Method Fair Value (USD) Implied Upside/Downside
Discounted Cash Flow (10Y) $1.40 -77.9%
Discounted Cash Flow (5Y) $5.76 -9.0%
Dividend Discount Model (Multi-Stage) $3.69 -41.8%
Dividend Discount Model (Stable) $4.93 -22.2%

Is Lamda Development SA (LAMDA.AT) undervalued or overvalued?

With the current market price at $6.33, 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 Lamda Development SA'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 3.3% 3.8%
Equity market risk premium 8.8% 9.8%
Adjusted beta 0.49 0.64
Cost of equity 7.6% 10.6%
Cost of debt 4.9% 6.9%
Tax rate 33.2% 44.1%
Debt/Equity ratio 1.22 1.22
After-tax WACC 5.2% 6.9%

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: 6.1% (range: 0.0% - 9.3%)

Key Projections:

  • Revenue growth from $665 (FY12-2024) to $1,442 (FY12-2034)
  • Net profit margin expansion from 7% to 7%
  • Capital expenditures maintained at approximately 28% of revenue
DCF Model Fair Value Enterprise Value % from Terminal Value
5-Year Growth $6 $2,332M 98.5%
10-Year Growth $1 $1,561M 88.2%
5-Year EBITDA $15 $3,888M 99.1%
10-Year EBITDA $20 $4,766M 96.1%

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: 9.1%
  • Long-term growth rate: 3.5%
  • Fair value: $3.69 (-41.8% from current price)

Stable DDM:

  • Stable payout ratio: 70% (Low) to 90% (High)
  • Cost of equity: 10.6% (Low) to 7.6% (High)
  • Long-term growth rate: 2.5% (Low) to 4.5% (High)
  • Fair value range: $2 to $8
  • Selected fair value: $4.93 (-22.2% from current price)

Key Financial Metrics

Metric Value
Market Capitalization $1119M
Enterprise Value $2433M
Trailing P/E 24.19
Forward P/E 17.33
Trailing EV/EBITDA 15.95
Current Dividend Yield 0.00%
Dividend Growth Rate (5Y) 0.00%
Debt-to-Equity Ratio 1.22

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) 33% $0.42
Discounted Cash Flow (5Y) 28% $1.44
Dividend Discount Model (Multi-Stage) 22% $0.74
Dividend Discount Model (Stable) 17% $0.74
Weighted Average 100% $3.71

Investment Conclusion

Based on our comprehensive valuation analysis, Lamda Development SA's weighted average intrinsic value is $3.71, which is approximately 41.5% below the current market price of $6.33.

Key investment considerations:

  • Strong projected earnings growth (7% to 7% margin)
  • Consistent cash flow generation

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