As of May 23, 2025, Shoe Zone PLC's estimated intrinsic value ranges from $97.29 to $466.58 per share, depending on the valuation methodology applied.
| Valuation Method | Fair Value (USD) | Implied Upside/Downside |
|---|---|---|
| Discounted Cash Flow (10Y) | $169.82 | +83.6% |
| Discounted Cash Flow (5Y) | $156.74 | +69.5% |
| Dividend Discount Model (Multi-Stage) | $129.28 | +39.8% |
| Dividend Discount Model (Stable) | $97.29 | +5.2% |
| Earnings Power Value | $466.58 | +404.4% |
Is Shoe Zone PLC (SHOE.L) undervalued or overvalued?
With the current market price at $92.50, 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 Shoe Zone 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 | 1.03 | 1.19 |
| Cost of equity | 10.2% | 13.3% |
| Cost of debt | 5.0% | 5.0% |
| Tax rate | 19.3% | 22.0% |
| Debt/Equity ratio | 0.67 | 0.67 |
| After-tax WACC | 7.7% | 9.5% |
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 | $195 | $121M | 65.3% |
| 10-Year Growth | $211 | $129M | 45.9% |
| 5-Year EBITDA | $148 | $116M | 63.8% |
| 10-Year EBITDA | $164 | $126M | 44.5% |
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 | $26M |
| Discount Rate (WACC) | 9.5% - 7.7% |
| Enterprise Value | $268M - $331M |
| Net Debt | $31M |
| Equity Value | $237M - $300M |
| Outstanding Shares | 0M |
| Fair Value | $512 - $648 |
| Selected Fair Value | $466.58 |
| Metric | Value |
|---|---|
| Market Capitalization | $53M |
| Enterprise Value | $84M |
| Trailing P/E | 7.17 |
| Forward P/E | 6.57 |
| Trailing EV/EBITDA | 5.55 |
| Current Dividend Yield | 1546.39% |
| Dividend Growth Rate (5Y) | 11.04% |
| Debt-to-Equity Ratio | 0.67 |
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% | $50.95 |
| Discounted Cash Flow (5Y) | 25% | $39.19 |
| Dividend Discount Model (Multi-Stage) | 20% | $25.86 |
| Dividend Discount Model (Stable) | 15% | $14.59 |
| Earnings Power Value | 10% | $46.66 |
| Weighted Average | 100% | $177.24 |
Based on our comprehensive valuation analysis, Shoe Zone PLC's weighted average intrinsic value is $177.24, which is approximately 91.6% above the current market price of $92.50.
Key investment considerations:
Given these factors, we believe Shoe Zone PLC is currently significantly undervalued with the potential for long-term appreciation based on the company's growth trajectory and financial strength.