As of May 31, 2025, PayPoint plc's estimated intrinsic value ranges from $610.15 to $1119.85 per share, depending on the valuation methodology applied.
| Valuation Method | Fair Value (USD) | Implied Upside/Downside |
|---|---|---|
| Discounted Cash Flow (10Y) | $1119.85 | +57.5% |
| Discounted Cash Flow (5Y) | $966.21 | +35.9% |
| Dividend Discount Model (Multi-Stage) | $682.06 | -4.1% |
| Dividend Discount Model (Stable) | $610.15 | -14.2% |
| Earnings Power Value | $1069.34 | +50.4% |
Is PayPoint plc (PAY.L) undervalued or overvalued?
With the current market price at $711.00, the stock appears to be significantly undervalued.
Intrinsic value represents the "true" worth of a company based on its fundamentals rather than market sentiment. We've employed multiple methodologies to triangulate PayPoint 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 | 0.61 | 0.8 |
| Cost of equity | 7.6% | 10.6% |
| Cost of debt | 4.4% | 4.9% |
| Tax rate | 19.4% | 20.8% |
| Debt/Equity ratio | 0.21 | 0.21 |
| After-tax WACC | 6.9% | 9.4% |
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 | $966 | $571M | 74.1% |
| 10-Year Growth | $1,120 | $680M | 55.2% |
| 5-Year EBITDA | $737 | $408M | 63.7% |
| 10-Year EBITDA | $917 | $535M | 43.1% |
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 | $52M |
| Discount Rate (WACC) | 9.4% - 6.9% |
| Enterprise Value | $546M - $743M |
| Net Debt | $(117)M |
| Equity Value | $663M - $860M |
| Outstanding Shares | 1M |
| Fair Value | $931 - $1,208 |
| Selected Fair Value | $1069.34 |
| Metric | Value |
|---|---|
| Market Capitalization | $506M |
| Enterprise Value | $389M |
| Trailing P/E | 12.60 |
| Forward P/E | 12.30 |
| Trailing EV/EBITDA | 4.15 |
| Current Dividend Yield | 576.18% |
| Dividend Growth Rate (5Y) | -16.94% |
| Debt-to-Equity Ratio | 0.21 |
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% | $335.96 |
| Discounted Cash Flow (5Y) | 25% | $241.55 |
| Dividend Discount Model (Multi-Stage) | 20% | $136.41 |
| Dividend Discount Model (Stable) | 15% | $91.52 |
| Earnings Power Value | 10% | $106.93 |
| Weighted Average | 100% | $912.38 |
Based on our comprehensive valuation analysis, PayPoint plc's weighted average intrinsic value is $912.38, which is approximately 28.3% above the current market price of $711.00.
Key investment considerations:
Given these factors, we believe PayPoint plc is currently significantly undervalued with the potential for long-term appreciation based on the company's growth trajectory and financial strength.