What is PTQ.V's Intrinsic value?

Protech Home Medical Corp (PTQ.V) Intrinsic Value Analysis

Executive Summary

As of June 8, 2025, Protech Home Medical Corp's estimated intrinsic value ranges from $43.38 to $43.38 per share, depending on the valuation methodology applied.

Valuation Method Fair Value (USD) Implied Upside/Downside
Earnings Power Value $43.38 +384.7%

Is Protech Home Medical Corp (PTQ.V) undervalued or overvalued?

With the current market price at $8.95, the stock appears to be significantly undervalued.

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 Protech Home Medical Corp's intrinsic value, including:

  1. 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 3.2% 3.7%
Equity market risk premium 4.7% 5.7%
Adjusted beta 0.33 0.66
Cost of equity 5.2% 8.4%
Cost of debt 5.0% 5.0%
Tax rate 2.5% 3.1%
Debt/Equity ratio 0.15 0.15
After-tax WACC 5.2% 8.0%

Valuation Methods

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 $58M
Discount Rate (WACC) 8.0% - 5.2%
Enterprise Value $722M - $1,109M
Net Debt $6M
Equity Value $716M - $1,103M
Outstanding Shares 27M
Fair Value $27 - $41
Selected Fair Value $43.38

Key Financial Metrics

Metric Value
Market Capitalization $240M
Enterprise Value $249M
Trailing P/E 0.00
Forward P/E 0.00
Trailing EV/EBITDA 7.30
Current Dividend Yield 0.00%
Dividend Growth Rate (5Y) 0.00%
Debt-to-Equity Ratio 0.15

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
Earnings Power Value 100% $4.34
Weighted Average 100% $43.38

Investment Conclusion

Based on our comprehensive valuation analysis, Protech Home Medical Corp's weighted average intrinsic value is $43.38, which is approximately 384.7% above the current market price of $8.95.

Key investment considerations:

  • Strong projected earnings growth (-6% to -5% margin)
  • Consistent cash flow generation
  • Conservative capital structure (Debt/Equity of 0.15)

Given these factors, we believe Protech Home Medical Corp is currently significantly undervalued with the potential for long-term appreciation based on the company's growth trajectory and financial strength.