What is SAVE.ST's Intrinsic value?

Nordnet AB (publ) (SAVE.ST) Intrinsic Value Analysis

Executive Summary

As of May 24, 2025, Nordnet AB (publ)'s estimated intrinsic value ranges from $204.72 to $359.95 per share, depending on the valuation methodology applied.

Valuation Method Fair Value (USD) Implied Upside/Downside
Discounted Cash Flow (10Y) $359.95 +38.2%
Discounted Cash Flow (5Y) $207.71 -20.2%
Dividend Discount Model (Multi-Stage) $204.72 -21.4%
Dividend Discount Model (Stable) $209.39 -19.6%

Is Nordnet AB (publ) (SAVE.ST) undervalued or overvalued?

With the current market price at $260.40, the stock appears to be fairly valued.

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 Nordnet AB (publ)'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

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 2.5% 3.0%
Equity market risk premium 5.1% 6.1%
Adjusted beta 0.89 1.37
Cost of equity 7.1% 11.8%
Cost of debt 4.0% 4.5%
Tax rate 18.9% 19.0%
Debt/Equity ratio 0.91 0.91
After-tax WACC 5.2% 7.9%

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: 6.6% (range: 0.0% - 9.3%)

Key Projections:

  • Revenue growth from $6,674 (FY12-2024) to $18,506 (FY12-2034)
  • Net profit margin expansion from 42% to 44%
  • Capital expenditures maintained at approximately 4% of revenue
DCF Model Fair Value Enterprise Value % from Terminal Value
5-Year Growth $208 $118,470M 85.6%
10-Year Growth $360 $156,890M 74.8%
5-Year EBITDA $20 $71,092M 76.1%
10-Year EBITDA $140 $101,350M 61.1%

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: 0.0%
  • Stable payout ratio: 90.0%
  • Growth transition: 5 years
  • Cost of equity: 9.5%
  • Long-term growth rate: 3.0%
  • Fair value: $204.72 (-21.4% from current price)

Stable DDM:

  • Stable payout ratio: 70% (Low) to 90% (High)
  • Cost of equity: 11.8% (Low) to 7.1% (High)
  • Long-term growth rate: 2.0% (Low) to 4.0% (High)
  • Fair value range: $81 to $337
  • Selected fair value: $209.39 (-19.6% from current price)

Key Financial Metrics

Metric Value
Market Capitalization $65715M
Enterprise Value $131768M
Trailing P/E 22.73
Forward P/E 21.82
Trailing EV/EBITDA 11.40
Current Dividend Yield 263.01%
Dividend Growth Rate (5Y) 0.00%
Debt-to-Equity Ratio 0.91

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) 33% $107.98
Discounted Cash Flow (5Y) 28% $51.93
Dividend Discount Model (Multi-Stage) 22% $40.94
Dividend Discount Model (Stable) 17% $31.41
Weighted Average 100% $258.07

Investment Conclusion

Based on our comprehensive valuation analysis, Nordnet AB (publ)'s weighted average intrinsic value is $258.07, which is approximately 0.9% below the current market price of $260.40.

Key investment considerations:

  • Strong projected earnings growth (42% to 44% margin)
  • Consistent cash flow generation

Given these factors, we believe Nordnet AB (publ) is currently fairly valued with the potential for long-term appreciation based on the company's growth trajectory and financial strength.