What is MEDX.SW's Intrinsic value?

Medmix Ltd (MEDX.SW) Intrinsic Value Analysis

Executive Summary

As of May 24, 2025, Medmix Ltd's estimated intrinsic value ranges from $5.83 to $13.04 per share, depending on the valuation methodology applied.

Valuation Method Fair Value (USD) Implied Upside/Downside
Discounted Cash Flow (10Y) $13.04 +32.4%
Discounted Cash Flow (5Y) $10.34 +5.0%
Dividend Discount Model (Multi-Stage) $5.83 -40.8%
Earnings Power Value $6.13 -37.8%

Is Medmix Ltd (MEDX.SW) undervalued or overvalued?

With the current market price at $9.85, the stock appears to be fairly valued.

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 Medmix Ltd'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 1.0% 1.5%
Equity market risk premium 5.1% 6.1%
Adjusted beta 1.23 1.39
Cost of equity 7.3% 10.4%
Cost of debt 4.0% 9.5%
Tax rate 6.5% 10.3%
Debt/Equity ratio 0.75 0.75
After-tax WACC 5.8% 9.6%

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: 7.7% (range: 0.0% - 9.3%)

Key Projections:

  • Revenue growth from $484 (FY12-2024) to $726 (FY12-2034)
  • Net profit margin expansion from -1% to 5%
  • Capital expenditures maintained at approximately 10% of revenue
DCF Model Fair Value Enterprise Value % from Terminal Value
5-Year Growth $10 $632M 84.2%
10-Year Growth $13 $743M 68.2%
5-Year EBITDA $28 $1,359M 92.6%
10-Year EBITDA $27 $1,337M 82.3%

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: 8.8%
  • Long-term growth rate: 3.0%
  • Fair value: $5.83 (-40.8% from current price)

Stable DDM:

  • Stable payout ratio: 70% (Low) to 90% (High)
  • Cost of equity: 10.4% (Low) to 7.3% (High)
  • Long-term growth rate: 2.0% (Low) to 4.0% (High)
  • Fair value range: $(1) to $(5)
  • Selected fair value: $-3.18 (-132.3% 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 $33M
Discount Rate (WACC) 9.6% - 5.8%
Enterprise Value $343M - $573M
Net Debt $205M
Equity Value $138M - $368M
Outstanding Shares 41M
Fair Value $3 - $9
Selected Fair Value $6.13

Key Financial Metrics

Metric Value
Market Capitalization $406M
Enterprise Value $612M
Trailing P/E 0.00
Forward P/E 2270.57
Trailing EV/EBITDA 18.80
Current Dividend Yield 346.24%
Dividend Growth Rate (5Y) -26.71%
Debt-to-Equity Ratio 0.75

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) 35% $3.91
Discounted Cash Flow (5Y) 29% $2.59
Dividend Discount Model (Multi-Stage) 24% $1.17
Earnings Power Value 12% $0.61
Weighted Average 100% $9.74

Investment Conclusion

Based on our comprehensive valuation analysis, Medmix Ltd's weighted average intrinsic value is $9.74, which is approximately 1.1% below the current market price of $9.85.

Key investment considerations:

  • Strong projected earnings growth (-1% to 5% margin)
  • Consistent cash flow generation

Given these factors, we believe Medmix Ltd is currently fairly valued with the potential for long-term appreciation based on the company's growth trajectory and financial strength.