As of June 6, 2025, Reach PLC's estimated intrinsic value ranges from $135.30 to $330.27 per share, depending on the valuation methodology applied.
| Valuation Method | Fair Value (USD) | Implied Upside/Downside |
|---|---|---|
| Discounted Cash Flow (10Y) | $205.77 | +181.9% |
| Discounted Cash Flow (5Y) | $196.36 | +169.0% |
| Dividend Discount Model (Multi-Stage) | $135.30 | +85.3% |
| Dividend Discount Model (Stable) | $160.03 | +119.2% |
| Earnings Power Value | $330.27 | +352.4% |
Is Reach PLC (RCH.L) undervalued or overvalued?
With the current market price at $73.00, 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 Reach 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 | 0.74 | 0.82 |
| Cost of equity | 8.4% | 10.7% |
| Cost of debt | 4.6% | 8.1% |
| Tax rate | 19.0% | 19.0% |
| Debt/Equity ratio | 0.26 | 0.26 |
| After-tax WACC | 7.5% | 9.8% |
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 | $196 | $654M | 64.7% |
| 10-Year Growth | $206 | $683M | 44.5% |
| 5-Year EBITDA | $89 | $319M | 27.5% |
| 10-Year EBITDA | $129 | $444M | 14.7% |
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 | $91M |
| Discount Rate (WACC) | 9.8% - 7.5% |
| Enterprise Value | $924M - $1,219M |
| Net Debt | $42M |
| Equity Value | $882M - $1,178M |
| Outstanding Shares | 3M |
| Fair Value | $283 - $378 |
| Selected Fair Value | $330.27 |
| Metric | Value |
|---|---|
| Market Capitalization | $228M |
| Enterprise Value | $269M |
| Trailing P/E | 4.25 |
| Forward P/E | 4.54 |
| Trailing EV/EBITDA | 1.80 |
| Current Dividend Yield | 980.16% |
| Dividend Growth Rate (5Y) | 5.19% |
| Debt-to-Equity Ratio | 0.26 |
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% | $61.73 |
| Discounted Cash Flow (5Y) | 25% | $49.09 |
| Dividend Discount Model (Multi-Stage) | 20% | $27.06 |
| Dividend Discount Model (Stable) | 15% | $24.00 |
| Earnings Power Value | 10% | $33.03 |
| Weighted Average | 100% | $194.91 |
Based on our comprehensive valuation analysis, Reach PLC's weighted average intrinsic value is $194.91, which is approximately 167.0% above the current market price of $73.00.
Key investment considerations:
Given these factors, we believe Reach PLC is currently significantly undervalued with the potential for long-term appreciation based on the company's growth trajectory and financial strength.