As of June 16, 2025, Mechanical Technology Inc's estimated intrinsic value ranges from $1.03 to $3.29 per share, depending on the valuation methodology applied.
| Valuation Method | Fair Value (USD) | Implied Upside/Downside |
|---|---|---|
| Discounted Cash Flow (10Y) | $3.29 | -74.0% |
| Discounted Cash Flow (5Y) | $2.93 | -76.8% |
| Dividend Discount Model (Multi-Stage) | $1.03 | -91.9% |
| Earnings Power Value | $1.76 | -86.1% |
Is Mechanical Technology Inc (MKTY) undervalued or overvalued?
With the current market price at $12.66, 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 Mechanical Technology 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 | 4.2% | 5.2% |
| Adjusted beta | 1.37 | 1.77 |
| Cost of equity | 9.0% | 13.5% |
| Cost of debt | 5.0% | 5.0% |
| Tax rate | 7.1% | 16.1% |
| Debt/Equity ratio | 1 | 1 |
| After-tax WACC | 6.8% | 8.8% |
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 | $3 | $26M | 75.5% |
| 10-Year Growth | $3 | $30M | 57.3% |
| 5-Year EBITDA | $6 | $63M | 90.0% |
| 10-Year EBITDA | $6 | $65M | 80.1% |
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 | $1M |
| Discount Rate (WACC) | 8.8% - 6.8% |
| Enterprise Value | $9M - $12M |
| Net Debt | $(12)M |
| Equity Value | $21M - $24M |
| Outstanding Shares | 13M |
| Fair Value | $2 - $2 |
| Selected Fair Value | $1.76 |
| Metric | Value |
|---|---|
| Market Capitalization | $163M |
| Enterprise Value | $151M |
| Trailing P/E | 0.00 |
| Forward P/E | 105.45 |
| Trailing EV/EBITDA | 30.90 |
| Current Dividend Yield | 0.00% |
| Dividend Growth Rate (5Y) | 0.00% |
| Debt-to-Equity Ratio | 1.00 |
To determine the most reliable intrinsic value estimate, we weigh each valuation method based on:
| Valuation Method | Weight | Weighted Value |
|---|---|---|
| Discounted Cash Flow (10Y) | 35% | $0.99 |
| Discounted Cash Flow (5Y) | 29% | $0.73 |
| Dividend Discount Model (Multi-Stage) | 24% | $0.21 |
| Earnings Power Value | 12% | $0.18 |
| Weighted Average | 100% | $2.47 |
Based on our comprehensive valuation analysis, Mechanical Technology Inc's weighted average intrinsic value is $2.47, which is approximately 80.5% below the current market price of $12.66.
Key investment considerations:
Given these factors, we believe Mechanical Technology Inc is currently significantly overvalued with the potential for long-term appreciation based on the company's growth trajectory and financial strength.