As of May 23, 2025, Ocean Outdoor Ltd's estimated intrinsic value ranges from $7.52 to $7.52 per share, depending on the valuation methodology applied.
| Valuation Method | Fair Value (USD) | Implied Upside/Downside |
|---|---|---|
| Earnings Power Value | $7.52 | -26.3% |
Is Ocean Outdoor Ltd (OOUT.L) undervalued or overvalued?
With the current market price at $10.20, 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 Ocean Outdoor Ltd'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 | 2.4% | 2.9% |
| Equity market risk premium | 4.8% | 5.8% |
| Adjusted beta | 0.9 | 1.01 |
| Cost of equity | 6.8% | 9.4% |
| Cost of debt | 7.0% | 7.0% |
| Tax rate | 1.9% | 3.6% |
| Debt/Equity ratio | 0.44 | 0.44 |
| After-tax WACC | 6.8% | 8.6% |
EPV assesses a company's value based on its current normalized earnings power, assuming no growth.
| EPV Component | Value |
|---|---|
| Normalized Earnings | $37M |
| Discount Rate (WACC) | 8.6% - 6.8% |
| Enterprise Value | $433M - $543M |
| Net Debt | $155M |
| Equity Value | $278M - $388M |
| Outstanding Shares | 54M |
| Fair Value | $5 - $7 |
| Selected Fair Value | $7.52 |
| Metric | Value |
|---|---|
| Market Capitalization | $550M |
| Enterprise Value | $756M |
| Trailing P/E | 0.00 |
| Forward P/E | 0.00 |
| Trailing EV/EBITDA | 3.25 |
| Current Dividend Yield | 0.00% |
| Dividend Growth Rate (5Y) | 0.00% |
| Debt-to-Equity Ratio | 0.44 |
To determine the most reliable intrinsic value estimate, we weigh each valuation method based on:
| Valuation Method | Weight | Weighted Value |
|---|---|---|
| Earnings Power Value | 100% | $0.75 |
| Weighted Average | 100% | $7.52 |
Based on our comprehensive valuation analysis, Ocean Outdoor Ltd's weighted average intrinsic value is $7.52, which is approximately 26.3% below the current market price of $10.20.
Key investment considerations:
Given these factors, we believe Ocean Outdoor Ltd is currently significantly overvalued with the potential for long-term appreciation based on the company's growth trajectory and financial strength.