What is MOV.WA's Intrinsic value?

Movie Games SA (MOV.WA) Intrinsic Value Analysis

Executive Summary

As of June 13, 2025, Movie Games SA's estimated intrinsic value ranges from $3.12 to $12.45 per share, depending on the valuation methodology applied.

Valuation Method Fair Value (USD) Implied Upside/Downside
Dividend Discount Model (Multi-Stage) $3.12 -80.8%
Dividend Discount Model (Stable) $12.45 -23.3%
Earnings Power Value $7.36 -54.7%

Is Movie Games SA (MOV.WA) undervalued or overvalued?

With the current market price at $16.24, the stock appears to be significantly 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 Movie Games SA's intrinsic value, including:

  1. Dividend Discount Model (DDM): Values the company based on expected future dividend payments
  2. 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 5.5% 6.0%
Equity market risk premium 6.3% 7.3%
Adjusted beta 0.37 0.41
Cost of equity 7.8% 9.5%
Cost of debt 6.1% 6.1%
Tax rate 14.8% 19.7%
Debt/Equity ratio 0.01 0.01
After-tax WACC 7.8% 9.5%

Valuation Methods

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: 8.7%
  • Long-term growth rate: 4.0%
  • Fair value: $3.12 (-80.8% from current price)

Stable DDM:

  • Stable payout ratio: 70% (Low) to 90% (High)
  • Cost of equity: 9.5% (Low) to 7.8% (High)
  • Long-term growth rate: 3.0% (Low) to 5.0% (High)
  • Fair value range: $6 to $19
  • Selected fair value: $12.45 (-23.3% 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 $1M
Discount Rate (WACC) 9.5% - 7.8%
Enterprise Value $13M - $16M
Net Debt $(5)M
Equity Value $18M - $20M
Outstanding Shares 3M
Fair Value $7 - $8
Selected Fair Value $7.36

Key Financial Metrics

Metric Value
Market Capitalization $42M
Enterprise Value $37M
Trailing P/E 27.73
Forward P/E 98.06
Trailing EV/EBITDA 5.50
Current Dividend Yield 0.00%
Dividend Growth Rate (5Y) 0.00%
Debt-to-Equity Ratio 0.01

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
Dividend Discount Model (Multi-Stage) 44% $0.62
Dividend Discount Model (Stable) 33% $1.87
Earnings Power Value 22% $0.74
Weighted Average 100% $7.17

Investment Conclusion

Based on our comprehensive valuation analysis, Movie Games SA's weighted average intrinsic value is $7.17, which is approximately 55.8% below the current market price of $16.24.

Key investment considerations:

  • Strong projected earnings growth (3% to 3% margin)
  • Consistent cash flow generation
  • Conservative capital structure (Debt/Equity of 0.01)

Given these factors, we believe Movie Games SA is currently significantly overvalued with the potential for long-term appreciation based on the company's growth trajectory and financial strength.