What is MARR.MI's Intrinsic value?

Marr SpA (MARR.MI) Intrinsic Value Analysis

Executive Summary

As of July 16, 2025, Marr SpA's estimated intrinsic value ranges from $7.22 to $15.03 per share, depending on the valuation methodology applied.

Valuation Method Fair Value (USD) Implied Upside/Downside
Discounted Cash Flow (10Y) $15.03 +51.5%
Discounted Cash Flow (5Y) $12.75 +28.6%
Dividend Discount Model (Multi-Stage) $7.90 -20.4%
Dividend Discount Model (Stable) $11.87 +19.6%
Earnings Power Value $7.22 -27.2%

Is Marr SpA (MARR.MI) undervalued or overvalued?

With the current market price at $9.92, the stock appears to be moderately 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 Marr SpA'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
  3. Earnings Power Value (EPV): Values the company based on its current earnings power, assuming no growth

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 3.7% 4.2%
Equity market risk premium 8.3% 9.3%
Adjusted beta 0.6 0.71
Cost of equity 8.6% 11.3%
Cost of debt 4.0% 7.3%
Tax rate 29.4% 29.4%
Debt/Equity ratio 0.69 0.69
After-tax WACC 6.3% 8.8%

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: 7.5% (range: 0.0% - 9.3%)

Key Projections:

  • Revenue growth from $2,033 (FY12-2024) to $4,021 (FY12-2034)
  • Net profit margin expansion from 2% to 2%
  • Capital expenditures maintained at approximately 1% of revenue
DCF Model Fair Value Enterprise Value % from Terminal Value
5-Year Growth $13 $1,165M 81.0%
10-Year Growth $15 $1,316M 67.2%
5-Year EBITDA $9 $905M 75.5%
10-Year EBITDA $12 $1,117M 61.3%

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: 10.0%
  • Long-term growth rate: 3.0%
  • Fair value: $7.90 (-20.4% from current price)

Stable DDM:

  • Stable payout ratio: 70% (Low) to 90% (High)
  • Cost of equity: 11.3% (Low) to 8.6% (High)
  • Long-term growth rate: 2.0% (Low) to 4.0% (High)
  • Fair value range: $7 to $17
  • Selected fair value: $11.87 (19.6% from current price)

3. Earnings Power Value (EPV)

EPV assesses a company's value based on its current normalized earnings power, assuming no growth.

EPV Component Value
Normalized Earnings $58M
Discount Rate (WACC) 8.8% - 6.3%
Enterprise Value $664M - $929M
Net Debt $316M
Equity Value $347M - $613M
Outstanding Shares 67M
Fair Value $5 - $9
Selected Fair Value $7.22

Key Financial Metrics

Metric Value
Market Capitalization $660M
Enterprise Value $976M
Trailing P/E 11.27
Forward P/E 13.99
Trailing EV/EBITDA 7.75
Current Dividend Yield 599.41%
Dividend Growth Rate (5Y) -5.06%
Debt-to-Equity Ratio 0.69

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) 30% $4.51
Discounted Cash Flow (5Y) 25% $3.19
Dividend Discount Model (Multi-Stage) 20% $1.58
Dividend Discount Model (Stable) 15% $1.78
Earnings Power Value 10% $0.72
Weighted Average 100% $11.78

Investment Conclusion

Based on our comprehensive valuation analysis, Marr SpA's intrinsic value is $11.78, which is approximately 18.8% above the current market price of $9.92.

Key investment considerations:

  • Strong projected earnings growth (2% to 2% margin)
  • Consistent cash flow generation

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