What is PTRO.L's Intrinsic value?

Pelatro PLC (PTRO.L) Intrinsic Value Analysis

Executive Summary

As of June 12, 2025, Pelatro PLC's estimated intrinsic value ranges from $5.68 to $5.68 per share, depending on the valuation methodology applied.

Valuation Method Fair Value (USD) Implied Upside/Downside
Earnings Power Value $5.68 +456.8%

Is Pelatro PLC (PTRO.L) undervalued or overvalued?

With the current market price at $1.02, 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 Pelatro PLC'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 4.0% 4.5%
Equity market risk premium 6.0% 7.0%
Adjusted beta 0.31 0.37
Cost of equity 5.8% 7.6%
Cost of debt 7.0% 23.0%
Tax rate 16.1% 18.5%
Debt/Equity ratio 0.84 0.84
After-tax WACC 5.8% 12.7%

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 $1M
Discount Rate (WACC) 12.7% - 5.8%
Enterprise Value $4M - $9M
Net Debt $(0)M
Equity Value $4M - $9M
Outstanding Shares 1M
Fair Value $5 - $10
Selected Fair Value $5.68

Key Financial Metrics

Metric Value
Market Capitalization $1M
Enterprise Value $1M
Trailing P/E 0.00
Forward P/E 0.00
Trailing EV/EBITDA 3.45
Current Dividend Yield 62.96%
Dividend Growth Rate (5Y) 0.00%
Debt-to-Equity Ratio 0.84

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% $0.57
Weighted Average 100% $5.68

Investment Conclusion

Based on our comprehensive valuation analysis, Pelatro PLC's weighted average intrinsic value is $5.68, which is approximately 456.8% above the current market price of $1.02.

Key investment considerations:

  • Strong projected earnings growth (-267% to -203% margin)
  • Consistent cash flow generation

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