What is SEEL's Intrinsic value?

Seelos Therapeutics Inc (SEEL) Intrinsic Value Analysis

Executive Summary

As of May 27, 2025, Seelos Therapeutics Inc's estimated intrinsic value ranges from $941.70 to $941.70 per share, depending on the valuation methodology applied.

Valuation Method Fair Value (USD) Implied Upside/Downside
Dividend Discount Model (Stable) $941.70 +73470.3%

Is Seelos Therapeutics Inc (SEEL) undervalued or overvalued?

With the current market price at $1.28, 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 Seelos Therapeutics Inc's intrinsic value, including:

  1. 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 3.9% 4.4%
Equity market risk premium 4.6% 5.6%
Adjusted beta 0.42 3.43
Cost of equity 5.8% 24.1%
Cost of debt 4.5% 4.5%
Tax rate 26.2% 27.0%
Debt/Equity ratio 142.13 142.13
After-tax WACC 3.3% 3.4%

Valuation Methods

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: 14.9%
  • Long-term growth rate: 2.5%
  • Fair value: $-76716670.00 (-5993489943.8% from current price)

Stable DDM:

  • Stable payout ratio: 70% (Low) to 90% (High)
  • Cost of equity: 24.1% (Low) to 5.8% (High)
  • Long-term growth rate: 2.0% (Low) to 3.1% (High)
  • Fair value range: $166 to $1,717
  • Selected fair value: $941.70 (73470.3% from current price)

Key Financial Metrics

Metric Value
Market Capitalization $0M
Enterprise Value $10M
Trailing P/E 0.02
Forward P/E 0.02
Trailing EV/EBITDA 9.85
Current Dividend Yield 0.00%
Dividend Growth Rate (5Y) 0.00%
Debt-to-Equity Ratio 142.13

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
Dividend Discount Model (Stable) 100% $141.25
Weighted Average 100% $941.70

Investment Conclusion

Based on our comprehensive valuation analysis, Seelos Therapeutics Inc's weighted average intrinsic value is $941.70, which is approximately 73470.3% above the current market price of $1.28.

Key investment considerations:

  • Strong projected earnings growth (-1720% to -1255% margin)
  • Consistent cash flow generation

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