What is LBUY's Intrinsic value?

Leafbuyer Technologies Inc (LBUY) Intrinsic Value Analysis

Executive Summary

As of June 21, 2025, Leafbuyer Technologies Inc's estimated intrinsic value ranges from $0.00 to $0.32 per share, depending on the valuation methodology applied.

Valuation Method Fair Value (USD) Implied Upside/Downside
Discounted Cash Flow (10Y) $0.32 +1402.2%
Discounted Cash Flow (5Y) $0.00 -91.5%
Dividend Discount Model (Stable) $0.27 +1162.0%

Is Leafbuyer Technologies Inc (LBUY) undervalued or overvalued?

With the current market price at $0.02, 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 Leafbuyer Technologies Inc'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 0.25 0.33
Cost of equity 5.0% 6.7%
Cost of debt 5.0% 5.0%
Tax rate 26.2% 27.0%
Debt/Equity ratio 0.67 0.67
After-tax WACC 4.5% 5.5%

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: 5-year DCF and 10-year DCF
  • Terminal Growth Rate: 0.0% (range: 3.0% - 5.0%)
  • Discount Rate: 5.0% (range: 0.0% - 9.3%)

Key Projections:

  • Revenue growth from $6 (FY06-2024) to $19 (FY06-2034)
  • Net profit margin expansion from -13% to 3%
  • Capital expenditures maintained at approximately 4% of revenue
DCF Model Fair Value Enterprise Value % from Terminal Value
5-Year Growth $0 $1M 150.5%
10-Year Growth $0 $32M 94.6%
5-Year EBITDA $0 $7M 107.3%
10-Year EBITDA $0 $22M 91.9%

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: 5.9%
  • Long-term growth rate: 3.4%
  • Fair value: $-0.02 (-178.4% from current price)

Stable DDM:

  • Stable payout ratio: 70% (Low) to 90% (High)
  • Cost of equity: 6.7% (Low) to 5.0% (High)
  • Long-term growth rate: 2.5% (Low) to 4.2% (High)
  • Fair value range: $0 to $0
  • Selected fair value: $0.27 (1162.0% from current price)

Key Financial Metrics

Metric Value
Market Capitalization $2M
Enterprise Value $3M
Trailing P/E 5.22
Forward P/E 5.22
Trailing EV/EBITDA 18.80
Current Dividend Yield 62.96%
Dividend Growth Rate (5Y) 0.00%
Debt-to-Equity Ratio 0.67

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) 43% $0.09
Discounted Cash Flow (5Y) 36% $0.00
Dividend Discount Model (Stable) 21% $0.04
Weighted Average 100% $0.19

Investment Conclusion

Based on our comprehensive valuation analysis, Leafbuyer Technologies Inc's weighted average intrinsic value is $0.19, which is approximately 817.3% above the current market price of $0.02.

Key investment considerations:

  • Strong projected earnings growth (-13% to 3% margin)

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