What is MOL.MI's Intrinsic value?

Gruppo MutuiOnline SpA (MOL.MI) Intrinsic Value Analysis

Executive Summary

As of July 3, 2025, Gruppo MutuiOnline SpA's estimated intrinsic value ranges from $24.60 to $49.36 per share, depending on the valuation methodology applied.

Valuation Method Fair Value (USD) Implied Upside/Downside
Discounted Cash Flow (10Y) $49.36 +12.2%
Discounted Cash Flow (5Y) $31.24 -29.0%
Dividend Discount Model (Multi-Stage) $27.69 -37.1%
Dividend Discount Model (Stable) $31.78 -27.8%
Earnings Power Value $24.60 -44.1%

Is Gruppo MutuiOnline SpA (MOL.MI) undervalued or overvalued?

With the current market price at $44.00, the stock appears to be moderately overvalued.

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 Gruppo MutuiOnline 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 0.39 0.47
Cost of equity 6.9% 9.0%
Cost of debt 4.0% 4.7%
Tax rate 28.7% 46.7%
Debt/Equity ratio 0.19 0.19
After-tax WACC 6.3% 8.0%

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: 7.2% (range: 0.0% - 9.3%)

Key Projections:

  • Revenue growth from $464 (FY12-2024) to $1,481 (FY12-2034)
  • Net profit margin expansion from 9% to 9%
  • Capital expenditures maintained at approximately 1% of revenue
DCF Model Fair Value Enterprise Value % from Terminal Value
5-Year Growth $31 $1,784M 83.8%
10-Year Growth $49 $2,508M 72.6%
5-Year EBITDA $9 $900M 68.0%
10-Year EBITDA $21 $1,377M 50.1%

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: 7.2%
  • Stable payout ratio: 90.0%
  • Growth transition: 5 years
  • Cost of equity: 8.0%
  • Long-term growth rate: 3.0%
  • Fair value: $27.69 (-37.1% from current price)

Stable DDM:

  • Stable payout ratio: 70% (Low) to 90% (High)
  • Cost of equity: 9.0% (Low) to 6.9% (High)
  • Long-term growth rate: 2.0% (Low) to 4.0% (High)
  • Fair value range: $16 to $48
  • Selected fair value: $31.78 (-27.8% 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 $107M
Discount Rate (WACC) 8.0% - 6.3%
Enterprise Value $1,334M - $1,702M
Net Debt $534M
Equity Value $800M - $1,168M
Outstanding Shares 40M
Fair Value $20 - $29
Selected Fair Value $24.60

Key Financial Metrics

Metric Value
Market Capitalization $1760M
Enterprise Value $2294M
Trailing P/E 28.14
Forward P/E 30.70
Trailing EV/EBITDA 6.00
Current Dividend Yield 24.68%
Dividend Growth Rate (5Y) -0.11%
Debt-to-Equity Ratio 0.19

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% $14.81
Discounted Cash Flow (5Y) 25% $7.81
Dividend Discount Model (Multi-Stage) 20% $5.54
Dividend Discount Model (Stable) 15% $4.77
Earnings Power Value 10% $2.46
Weighted Average 100% $35.38

Investment Conclusion

Based on our comprehensive valuation analysis, Gruppo MutuiOnline SpA's intrinsic value is $35.38, which is approximately 19.6% below the current market price of $44.00.

Key investment considerations:

  • Strong projected earnings growth (9% to 9% margin)
  • Consistent cash flow generation
  • Conservative capital structure (Debt/Equity of 0.19)

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