What is NM's Intrinsic value?

Navios Maritime Holdings Inc (NM) Intrinsic Value Analysis

Executive Summary

As of June 1, 2025, Navios Maritime Holdings Inc's estimated intrinsic value ranges from $4.76 to $37.00 per share, depending on the valuation methodology applied.

Valuation Method Fair Value (USD) Implied Upside/Downside
Dividend Discount Model (Stable) $37.00 +1530.1%
Earnings Power Value $4.76 +109.7%

Is Navios Maritime Holdings Inc (NM) undervalued or overvalued?

With the current market price at $2.27, 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 Navios Maritime Holdings Inc'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 4.2% 4.7%
Equity market risk premium 4.6% 5.6%
Adjusted beta 1.37 1.9
Cost of equity 10.5% 15.8%
Cost of debt 8.9% 17.0%
Tax rate 0.7% 9.2%
Debt/Equity ratio 13.21 13.21
After-tax WACC 9.0% 15.4%

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: 13.2%
  • Long-term growth rate: 4.0%
  • Fair value: $-10.04 (-542.4% from current price)

Stable DDM:

  • Stable payout ratio: 70% (Low) to 90% (High)
  • Cost of equity: 15.8% (Low) to 10.5% (High)
  • Long-term growth rate: 3.0% (Low) to 5.0% (High)
  • Fair value range: $18 to $56
  • Selected fair value: $37.00 (1530.1% 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 $85M
Discount Rate (WACC) 15.4% - 9.0%
Enterprise Value $548M - $944M
Net Debt $637M
Equity Value $(89)M - $306M
Outstanding Shares 23M
Fair Value $(4) - $13
Selected Fair Value $4.76

Key Financial Metrics

Metric Value
Market Capitalization $52M
Enterprise Value $689M
Trailing P/E 0.67
Forward P/E 0.67
Trailing EV/EBITDA 5.50
Current Dividend Yield 714.06%
Dividend Growth Rate (5Y) -34.32%
Debt-to-Equity Ratio 13.21

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 (Stable) 60% $5.55
Earnings Power Value 40% $0.48
Weighted Average 100% $24.11

Investment Conclusion

Based on our comprehensive valuation analysis, Navios Maritime Holdings Inc's weighted average intrinsic value is $24.11, which is approximately 961.9% above the current market price of $2.27.

Key investment considerations:

  • Strong projected earnings growth (-24% to -9% margin)
  • Consistent cash flow generation

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