What is OTMP.L's Intrinsic value?

Onthemarket PLC (OTMP.L) Intrinsic Value Analysis

Executive Summary

As of June 16, 2025, Onthemarket PLC's estimated intrinsic value ranges from $6.31 to $84.27 per share, depending on the valuation methodology applied.

Valuation Method Fair Value (USD) Implied Upside/Downside
Dividend Discount Model (Multi-Stage) $6.31 -94.2%
Earnings Power Value $84.27 -22.7%

Is Onthemarket PLC (OTMP.L) undervalued or overvalued?

With the current market price at $109.00, 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 Onthemarket PLC'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 4.0% 4.5%
Equity market risk premium 6.0% 7.0%
Adjusted beta 0.4 0.63
Cost of equity 6.4% 9.4%
Cost of debt 5.0% 5.0%
Tax rate 19.0% 19.0%
Debt/Equity ratio 0.01 0.01
After-tax WACC 6.3% 9.3%

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: 7.9%
  • Long-term growth rate: 4.0%
  • Fair value: $6.31 (-94.2% from current price)

Stable DDM:

  • Stable payout ratio: 70% (Low) to 90% (High)
  • Cost of equity: 9.4% (Low) to 6.4% (High)
  • Long-term growth rate: 3.0% (Low) to 5.0% (High)
  • Fair value range: $(8) to $(50)
  • Selected fair value: $-29.29 (-126.9% 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 $4M
Discount Rate (WACC) 9.3% - 6.3%
Enterprise Value $46M - $68M
Net Debt $(11)M
Equity Value $57M - $78M
Outstanding Shares 1M
Fair Value $71 - $98
Selected Fair Value $84.27

Key Financial Metrics

Metric Value
Market Capitalization $87M
Enterprise Value $77M
Trailing P/E 0.00
Forward P/E 496.39
Trailing EV/EBITDA 10.20
Current Dividend Yield 62.96%
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) 67% $1.26
Earnings Power Value 33% $8.43
Weighted Average 100% $32.30

Investment Conclusion

Based on our comprehensive valuation analysis, Onthemarket PLC's weighted average intrinsic value is $32.30, which is approximately 70.4% below the current market price of $109.00.

Key investment considerations:

  • Strong projected earnings growth (0% to 0% margin)
  • Conservative capital structure (Debt/Equity of 0.01)

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