As of June 18, 2025, Northern 3 VCT PLC's estimated intrinsic value ranges from $11.60 to $46.03 per share, depending on the valuation methodology applied.
| Valuation Method | Fair Value (USD) | Implied Upside/Downside |
|---|---|---|
| Discounted Cash Flow (10Y) | $46.03 | -45.2% |
| Discounted Cash Flow (5Y) | $45.28 | -46.1% |
| Dividend Discount Model (Multi-Stage) | $14.43 | -82.8% |
| Dividend Discount Model (Stable) | $15.88 | -81.1% |
| Earnings Power Value | $11.60 | -86.2% |
Is Northern 3 VCT PLC (NTN.L) undervalued or overvalued?
With the current market price at $84.00, 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 Northern 3 VCT PLC'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 | 4.0% | 4.5% |
| Equity market risk premium | 6.0% | 7.0% |
| Adjusted beta | 1.62 | 1.66 |
| Cost of equity | 13.7% | 16.5% |
| Cost of debt | 5.0% | 5.0% |
| Tax rate | 19.0% | 19.0% |
| Debt/Equity ratio | 1 | 1 |
| After-tax WACC | 8.9% | 10.3% |
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 | $45 | $34M | 71.4% |
| 10-Year Growth | $46 | $36M | 49.6% |
| 5-Year EBITDA | $54 | $48M | 79.3% |
| 10-Year EBITDA | $52 | $45M | 60.2% |
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 | $(2)M |
| Discount Rate (WACC) | 10.3% - 8.9% |
| Enterprise Value | $(15)M - $(18)M |
| Net Debt | $(34)M |
| Equity Value | $19M - $16M |
| Outstanding Shares | 2M |
| Fair Value | $12 - $11 |
| Selected Fair Value | $11.60 |
| Metric | Value |
|---|---|
| Market Capitalization | $128M |
| Enterprise Value | $93M |
| Trailing P/E | 34.25 |
| Forward P/E | 49.87 |
| Trailing EV/EBITDA | 16.65 |
| Current Dividend Yield | 469.30% |
| Dividend Growth Rate (5Y) | 12.32% |
| Debt-to-Equity Ratio | 1.17 |
To determine the most reliable intrinsic value estimate, we weigh each valuation method based on:
| Valuation Method | Weight | Weighted Value |
|---|---|---|
| Discounted Cash Flow (10Y) | 30% | $13.81 |
| Discounted Cash Flow (5Y) | 25% | $11.32 |
| Dividend Discount Model (Multi-Stage) | 20% | $2.89 |
| Dividend Discount Model (Stable) | 15% | $2.38 |
| Earnings Power Value | 10% | $1.16 |
| Weighted Average | 100% | $31.56 |
Based on our comprehensive valuation analysis, Northern 3 VCT PLC's weighted average intrinsic value is $31.56, which is approximately 62.4% below the current market price of $84.00.
Key investment considerations:
Given these factors, we believe Northern 3 VCT PLC is currently significantly overvalued with the potential for long-term appreciation based on the company's growth trajectory and financial strength.