What is MCL.L's Intrinsic value?

Morses Club PLC (MCL.L) Intrinsic Value Analysis

Executive Summary

As of June 10, 2025, Morses Club PLC's estimated intrinsic value ranges from $254.22 to $254.22 per share, depending on the valuation methodology applied.

Valuation Method Fair Value (USD) Implied Upside/Downside
Earnings Power Value $254.22 +120955.5%

Is Morses Club PLC (MCL.L) undervalued or overvalued?

With the current market price at $0.21, 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 Morses Club PLC's intrinsic value, including:

  1. 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 4.0% 4.5%
Equity market risk premium 6.0% 7.0%
Adjusted beta 1.32 6.1
Cost of equity 11.9% 47.5%
Cost of debt 4.6% 13.5%
Tax rate 19.5% 20.9%
Debt/Equity ratio 48.49 48.49
After-tax WACC 3.9% 11.4%

Valuation Methods

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 $31M
Discount Rate (WACC) 11.4% - 3.9%
Enterprise Value $269M - $797M
Net Debt $7M
Equity Value $262M - $790M
Outstanding Shares 2M
Fair Value $126 - $382
Selected Fair Value $254.22

Key Financial Metrics

Metric Value
Market Capitalization $0M
Enterprise Value $8M
Trailing P/E 0.00
Forward P/E 0.00
Trailing EV/EBITDA 6.00
Current Dividend Yield 30932.82%
Dividend Growth Rate (5Y) -10.85%
Debt-to-Equity Ratio 48.49

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
Earnings Power Value 100% $25.42
Weighted Average 100% $254.22

Investment Conclusion

Based on our comprehensive valuation analysis, Morses Club PLC's weighted average intrinsic value is $254.22, which is approximately 120955.5% above the current market price of $0.21.

Key investment considerations:

  • Strong projected earnings growth (-30% to -28% margin)
  • Consistent cash flow generation

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