As of May 22, 2025, Prosegur Compania de Seguridad SA's estimated intrinsic value ranges from $1.91 to $7.85 per share, depending on the valuation methodology applied.
| Valuation Method | Fair Value (USD) | Implied Upside/Downside |
|---|---|---|
| Discounted Cash Flow (10Y) | $4.26 | +54.5% |
| Discounted Cash Flow (5Y) | $3.78 | +37.3% |
| Dividend Discount Model (Multi-Stage) | $2.36 | -14.2% |
| Dividend Discount Model (Stable) | $1.91 | -30.7% |
| Earnings Power Value | $7.85 | +185.0% |
Is Prosegur Compania de Seguridad SA (PSG.MC) undervalued or overvalued?
With the current market price at $2.75, 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 Prosegur Compania de Seguridad SA'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 | 3.1% | 3.6% |
| Equity market risk premium | 7.4% | 8.4% |
| Adjusted beta | 0.84 | 0.94 |
| Cost of equity | 9.4% | 12.0% |
| Cost of debt | 4.0% | 4.5% |
| Tax rate | 25.0% | 25.0% |
| Debt/Equity ratio | 1.44 | 1.44 |
| After-tax WACC | 5.6% | 6.9% |
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 | $4 | $3,521M | 77.0% |
| 10-Year Growth | $4 | $3,779M | 61.0% |
| 5-Year EBITDA | $1 | $2,130M | 62.0% |
| 10-Year EBITDA | $2 | $2,641M | 44.1% |
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 | $355M |
| Discount Rate (WACC) | 6.9% - 5.6% |
| Enterprise Value | $5,141M - $6,336M |
| Net Debt | $1,460M |
| Equity Value | $3,681M - $4,877M |
| Outstanding Shares | 545M |
| Fair Value | $7 - $9 |
| Selected Fair Value | $7.85 |
| Metric | Value |
|---|---|
| Market Capitalization | $1502M |
| Enterprise Value | $2961M |
| Trailing P/E | 12.64 |
| Forward P/E | 11.04 |
| Trailing EV/EBITDA | 3.75 |
| Current Dividend Yield | 603.98% |
| Dividend Growth Rate (5Y) | 12.93% |
| Debt-to-Equity Ratio | 1.44 |
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% | $1.28 |
| Discounted Cash Flow (5Y) | 25% | $0.95 |
| Dividend Discount Model (Multi-Stage) | 20% | $0.47 |
| Dividend Discount Model (Stable) | 15% | $0.29 |
| Earnings Power Value | 10% | $0.79 |
| Weighted Average | 100% | $3.77 |
Based on our comprehensive valuation analysis, Prosegur Compania de Seguridad SA's weighted average intrinsic value is $3.77, which is approximately 36.7% above the current market price of $2.75.
Key investment considerations:
Given these factors, we believe Prosegur Compania de Seguridad SA is currently significantly undervalued with the potential for long-term appreciation based on the company's growth trajectory and financial strength.