As of May 23, 2025, Reti Telematiche Italiane SpA's estimated intrinsic value ranges from $0.67 to $3.89 per share, depending on the valuation methodology applied.
| Valuation Method | Fair Value (USD) | Implied Upside/Downside |
|---|---|---|
| Discounted Cash Flow (10Y) | $3.89 | +25.4% |
| Discounted Cash Flow (5Y) | $2.28 | -26.3% |
| Dividend Discount Model (Multi-Stage) | $1.13 | -63.4% |
| Dividend Discount Model (Stable) | $1.18 | -62.1% |
| Earnings Power Value | $0.67 | -78.5% |
Is Reti Telematiche Italiane SpA (LIT.MI) undervalued or overvalued?
With the current market price at $3.10, 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 Reti Telematiche Italiane SpA'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 | 3.8% | 4.3% |
| Equity market risk premium | 6.9% | 7.9% |
| Adjusted beta | 0.84 | 0.94 |
| Cost of equity | 9.6% | 12.3% |
| Cost of debt | 5.0% | 5.0% |
| Tax rate | 3.6% | 4.0% |
| Debt/Equity ratio | 0.37 | 0.37 |
| After-tax WACC | 8.3% | 10.2% |
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 | $2 | $509M | 80.8% |
| 10-Year Growth | $4 | $765M | 63.5% |
| 5-Year EBITDA | $3 | $661M | 85.3% |
| 10-Year EBITDA | $4 | $856M | 67.4% |
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 | $23M |
| Discount Rate (WACC) | 10.2% - 8.3% |
| Enterprise Value | $224M - $276M |
| Net Debt | $143M |
| Equity Value | $81M - $133M |
| Outstanding Shares | 160M |
| Fair Value | $1 - $1 |
| Selected Fair Value | $0.67 |
| Metric | Value |
|---|---|
| Market Capitalization | $496M |
| Enterprise Value | $639M |
| Trailing P/E | 30.06 |
| Forward P/E | 31.25 |
| Trailing EV/EBITDA | 7.60 |
| Current Dividend Yield | 95.78% |
| Dividend Growth Rate (5Y) | 14.47% |
| Debt-to-Equity Ratio | 0.37 |
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% | $1.17 |
| Discounted Cash Flow (5Y) | 25% | $0.57 |
| Dividend Discount Model (Multi-Stage) | 20% | $0.23 |
| Dividend Discount Model (Stable) | 15% | $0.18 |
| Earnings Power Value | 10% | $0.07 |
| Weighted Average | 100% | $2.21 |
Based on our comprehensive valuation analysis, Reti Telematiche Italiane SpA's weighted average intrinsic value is $2.21, which is approximately 28.8% below the current market price of $3.10.
Key investment considerations:
Given these factors, we believe Reti Telematiche Italiane SpA is currently significantly overvalued with the potential for long-term appreciation based on the company's growth trajectory and financial strength.