What is PUM.DE's Intrinsic value?

Puma SE (PUM.DE) Intrinsic Value Analysis

Executive Summary

As of July 10, 2025, Puma SE's estimated intrinsic value ranges from $12.66 to $39.46 per share, depending on the valuation methodology applied.

Valuation Method Fair Value (USD) Implied Upside/Downside
Discounted Cash Flow (10Y) $39.46 +69.8%
Discounted Cash Flow (5Y) $33.36 +43.5%
Dividend Discount Model (Multi-Stage) $24.40 +5.0%
Dividend Discount Model (Stable) $12.66 -45.5%
Earnings Power Value $34.59 +48.8%

Is Puma SE (PUM.DE) undervalued or overvalued?

With the current market price at $23.24, 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 Puma SE's intrinsic value, including:

  1. Discounted Cash Flow (DCF): Values the company based on projected future cash flows
  2. Dividend Discount Model (DDM): Values the company based on expected future dividend payments
  3. 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 2.8% 3.3%
Equity market risk premium 5.1% 6.1%
Adjusted beta 1 1.18
Cost of equity 7.9% 11.0%
Cost of debt 4.3% 5.1%
Tax rate 24.4% 24.9%
Debt/Equity ratio 0.5 0.5
After-tax WACC 6.3% 8.6%

Valuation Methods

1. Discounted Cash Flow (DCF) Valuation

Our DCF model projects cash flows over 5-year and 10-year horizons, with the following key assumptions:

  • Forecast Period: 5-year DCF and 10-year DCF
  • Terminal Growth Rate: 0.0% (range: 3.0% - 5.0%)
  • Discount Rate: 7.5% (range: 0.0% - 9.3%)

Key Projections:

  • Revenue growth from $8,817 (FY12-2024) to $11,671 (FY12-2034)
  • Net profit margin expansion from 4% to 4%
  • Capital expenditures maintained at approximately 3% of revenue
DCF Model Fair Value Enterprise Value % from Terminal Value
5-Year Growth $33 $7,304M 72.3%
10-Year Growth $39 $8,217M 53.5%
5-Year EBITDA $12 $4,082M 50.5%
10-Year EBITDA $21 $5,466M 30.1%

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: 63.1%
  • Stable payout ratio: 90.0%
  • Growth transition: 5 years
  • Cost of equity: 9.4%
  • Long-term growth rate: 0.5%
  • Fair value: $24.40 (5.0% from current price)

Stable DDM:

  • Stable payout ratio: 70% (Low) to 90% (High)
  • Cost of equity: 11.0% (Low) to 7.9% (High)
  • Long-term growth rate: 0.0% (Low) to 1.0% (High)
  • Fair value range: $8 to $17
  • Selected fair value: $12.66 (-45.5% 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 $546M
Discount Rate (WACC) 8.6% - 6.3%
Enterprise Value $6,333M - $8,643M
Net Debt $2,310M
Equity Value $4,023M - $6,333M
Outstanding Shares 150M
Fair Value $27 - $42
Selected Fair Value $34.59

Key Financial Metrics

Metric Value
Market Capitalization $3479M
Enterprise Value $5789M
Trailing P/E 17.89
Forward P/E 10.11
Trailing EV/EBITDA 2.85
Current Dividend Yield 354.04%
Dividend Growth Rate (5Y) 18.64%
Debt-to-Equity Ratio 0.50

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
Discounted Cash Flow (10Y) 30% $11.84
Discounted Cash Flow (5Y) 25% $8.34
Dividend Discount Model (Multi-Stage) 20% $4.88
Dividend Discount Model (Stable) 15% $1.90
Earnings Power Value 10% $3.46
Weighted Average 100% $30.42

Investment Conclusion

Based on our comprehensive valuation analysis, Puma SE's intrinsic value is $30.42, which is approximately 30.9% above the current market price of $23.24.

Key investment considerations:

  • Strong projected earnings growth (4% to 4% margin)
  • Consistent cash flow generation
  • Historical dividend growth of 18.64%

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