What is SDRY.L's Intrinsic value?

Superdry PLC (SDRY.L) Intrinsic Value Analysis

Executive Summary

As of May 22, 2025, Superdry PLC's estimated intrinsic value ranges from $77.08 to $77.08 per share, depending on the valuation methodology applied.

Valuation Method Fair Value (USD) Implied Upside/Downside
Earnings Power Value $77.08 +2239.5%

Is Superdry PLC (SDRY.L) undervalued or overvalued?

With the current market price at $3.29, 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 Superdry 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 0.32 0.64
Cost of equity 5.9% 9.5%
Cost of debt 7.0% 15.9%
Tax rate 9.1% 19.2%
Debt/Equity ratio 10.18 10.18
After-tax WACC 6.3% 12.5%

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 $71M
Discount Rate (WACC) 12.5% - 6.3%
Enterprise Value $564M - $1,119M
Net Debt $217M
Equity Value $347M - $902M
Outstanding Shares 8M
Fair Value $43 - $111
Selected Fair Value $77.08

Key Financial Metrics

Metric Value
Market Capitalization $27M
Enterprise Value $243M
Trailing P/E 0.00
Forward P/E 0.00
Trailing EV/EBITDA 6.95
Current Dividend Yield 1272.85%
Dividend Growth Rate (5Y) -100.00%
Debt-to-Equity Ratio 10.18

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% $7.71
Weighted Average 100% $77.08

Investment Conclusion

Based on our comprehensive valuation analysis, Superdry PLC's weighted average intrinsic value is $77.08, which is approximately 2239.5% above the current market price of $3.29.

Key investment considerations:

  • Strong projected earnings growth (-24% to 0% margin)
  • Consistent cash flow generation

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