What is SBN.TO's Intrinsic value?

S Split Corp (SBN.TO) Intrinsic Value Analysis

Executive Summary

As of May 31, 2025, S Split Corp's estimated intrinsic value ranges from $12.89 to $12.89 per share, depending on the valuation methodology applied.

Valuation Method Fair Value (USD) Implied Upside/Downside
Earnings Power Value $12.89 +390.1%

Is S Split Corp (SBN.TO) undervalued or overvalued?

With the current market price at $2.63, 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 S Split 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 5.1% 6.1%
Adjusted beta 0.35 0.5
Cost of equity 5.0% 7.2%
Cost of debt 5.0% 5.0%
Tax rate 25.9% 26.5%
Debt/Equity ratio 1 1
After-tax WACC 4.3% 5.4%

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 $0M
Discount Rate (WACC) 5.4% - 4.3%
Enterprise Value $4M - $5M
Net Debt $(0)M
Equity Value $4M - $5M
Outstanding Shares 0M
Fair Value $11 - $14
Selected Fair Value $12.89

Key Financial Metrics

Metric Value
Market Capitalization $1M
Enterprise Value $1M
Trailing P/E 0.00
Forward P/E 0.00
Trailing EV/EBITDA 7.90
Current Dividend Yield 2623.80%
Dividend Growth Rate (5Y) -23.91%
Debt-to-Equity Ratio 1.14

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% $1.29
Weighted Average 100% $12.89

Investment Conclusion

Based on our comprehensive valuation analysis, S Split Corp's weighted average intrinsic value is $12.89, which is approximately 390.1% above the current market price of $2.63.

Key investment considerations:

  • Strong projected earnings growth (-59% to -9% margin)
  • Consistent cash flow generation

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