What is MSRT's Intrinsic value?

Massroots Inc (MSRT) Intrinsic Value Analysis

Executive Summary

As of June 9, 2025, Massroots Inc's estimated intrinsic value ranges from $70.25 to $95.08 per share, depending on the valuation methodology applied.

Valuation Method Fair Value (USD) Implied Upside/Downside
Discounted Cash Flow (10Y) $95.08 +1844.3%
Discounted Cash Flow (5Y) $86.89 +1676.8%
Dividend Discount Model (Stable) $70.25 +1336.6%

Is Massroots Inc (MSRT) undervalued or overvalued?

With the current market price at $4.89, 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 Massroots Inc'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

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 3.2% 3.7%
Equity market risk premium 4.2% 5.2%
Adjusted beta 0.98 1.01
Cost of equity 7.3% 9.5%
Cost of debt 6.3% 7.0%
Tax rate 27.0% 27.0%
Debt/Equity ratio 0.11 0.11
After-tax WACC 7.1% 9.0%

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: 8.0% (range: 0.0% - 9.3%)

Key Projections:

  • Revenue growth from $0 (FY12-2020) to $0 (FY12-2030)
  • Net profit margin expansion from -211357% to -343%
  • Capital expenditures maintained at approximately 8% of revenue
DCF Model Fair Value Enterprise Value % from Terminal Value
5-Year Growth $87 $589M 72.9%
10-Year Growth $95 $644M 52.2%
5-Year EBITDA $30 $210M 24.0%
10-Year EBITDA $51 $347M 11.3%

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: 8.4%
  • Long-term growth rate: 0.5%
  • Fair value: $-4.14 (-184.7% from current price)

Stable DDM:

  • Stable payout ratio: 70% (Low) to 90% (High)
  • Cost of equity: 9.5% (Low) to 7.3% (High)
  • Long-term growth rate: 0.0% (Low) to 1.0% (High)
  • Fair value range: $48 to $92
  • Selected fair value: $70.25 (1336.6% from current price)

Key Financial Metrics

Metric Value
Market Capitalization $33M
Enterprise Value $38M
Trailing P/E 0.75
Forward P/E 0.75
Trailing EV/EBITDA 1.60
Current Dividend Yield 0.00%
Dividend Growth Rate (5Y) 0.00%
Debt-to-Equity Ratio 0.11

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) 43% $28.52
Discounted Cash Flow (5Y) 36% $21.72
Dividend Discount Model (Stable) 21% $10.54
Weighted Average 100% $86.83

Investment Conclusion

Based on our comprehensive valuation analysis, Massroots Inc's weighted average intrinsic value is $86.83, which is approximately 1675.7% above the current market price of $4.89.

Key investment considerations:

  • Strong projected earnings growth (-211357% to -343% margin)
  • Consistent cash flow generation
  • Conservative capital structure (Debt/Equity of 0.11)

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