As of May 24, 2025, Magnet Forensics Inc's estimated intrinsic value ranges from $2.64 to $9.56 per share, depending on the valuation methodology applied.
| Valuation Method | Fair Value (USD) | Implied Upside/Downside |
|---|---|---|
| Discounted Cash Flow (10Y) | $7.33 | -83.4% |
| Discounted Cash Flow (5Y) | $2.64 | -94.0% |
| Dividend Discount Model (Multi-Stage) | $6.99 | -84.2% |
| Dividend Discount Model (Stable) | $2.85 | -93.6% |
| Earnings Power Value | $9.56 | -78.4% |
Is Magnet Forensics Inc (MAGT.TO) undervalued or overvalued?
With the current market price at $44.24, 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 Magnet Forensics Inc'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 | 3.2% | 3.7% |
| Equity market risk premium | 5.1% | 6.1% |
| Adjusted beta | 0.86 | 0.92 |
| Cost of equity | 7.6% | 9.7% |
| Cost of debt | 4.0% | 4.5% |
| Tax rate | 24.2% | 29.7% |
| Debt/Equity ratio | 0.01 | 0.01 |
| After-tax WACC | 7.5% | 9.7% |
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 | $(63)M | 71.8% |
| 10-Year Growth | $5 | $75M | 104.8% |
| 5-Year EBITDA | $11 | $291M | 106.1% |
| 10-Year EBITDA | $16 | $530M | 100.7% |
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 | $12M |
| Discount Rate (WACC) | 9.7% - 7.5% |
| Enterprise Value | $122M - $157M |
| Net Debt | $(140)M |
| Equity Value | $262M - $297M |
| Outstanding Shares | 41M |
| Fair Value | $6 - $7 |
| Selected Fair Value | $9.56 |
| Metric | Value |
|---|---|
| Market Capitalization | $1808M |
| Enterprise Value | $1613M |
| Trailing P/E | 352.95 |
| Forward P/E | 220.17 |
| Trailing EV/EBITDA | 19.55 |
| Current Dividend Yield | 0.00% |
| Dividend Growth Rate (5Y) | 0.00% |
| 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% | $2.20 |
| Discounted Cash Flow (5Y) | 25% | $0.66 |
| Dividend Discount Model (Multi-Stage) | 20% | $1.40 |
| Dividend Discount Model (Stable) | 15% | $0.43 |
| Earnings Power Value | 10% | $0.96 |
| Weighted Average | 100% | $5.64 |
Based on our comprehensive valuation analysis, Magnet Forensics Inc's weighted average intrinsic value is $5.64, which is approximately 87.2% below the current market price of $44.24.
Key investment considerations:
Given these factors, we believe Magnet Forensics Inc is currently significantly overvalued with the potential for long-term appreciation based on the company's growth trajectory and financial strength.