What is SKLN.TA's Intrinsic value?

Skyline Investments Inc (SKLN.TA) Intrinsic Value Analysis

Executive Summary

As of June 7, 2025, Skyline Investments Inc's estimated intrinsic value ranges from $329.43 to $329.43 per share, depending on the valuation methodology applied.

Valuation Method Fair Value (USD) Implied Upside/Downside
Discounted Cash Flow (10Y) $329.43 -75.7%

Is Skyline Investments Inc (SKLN.TA) undervalued or overvalued?

With the current market price at $1355.00, the stock appears to be significantly overvalued.

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 Skyline Investments Inc's intrinsic value, including:

  1. Discounted Cash Flow (DCF): Values the company based on projected future cash flows

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 4.8% 5.3%
Equity market risk premium 6.1% 7.1%
Adjusted beta 0.5 0.67
Cost of equity 7.9% 10.6%
Cost of debt 5.1% 7.0%
Tax rate 20.0% 25.0%
Debt/Equity ratio 2.99 2.99
After-tax WACC 5.0% 6.6%

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: 10-year DCF
  • Terminal Growth Rate: 0.0% (range: 3.0% - 5.0%)
  • Discount Rate: 5.8% (range: 0.0% - 9.3%)

Key Projections:

  • Revenue growth from $328 (FY12-2024) to $452 (FY12-2034)
  • Net profit margin expansion from -48% to -27%
  • Capital expenditures maintained at approximately 31% of revenue
DCF Model Fair Value Enterprise Value % from Terminal Value
5-Year Growth $(1,234) $131M 93.1%
10-Year Growth $329 $462M 90.9%
5-Year EBITDA $1,401 $645M 98.6%
10-Year EBITDA $1,699 $696M 94.0%

Key Financial Metrics

Metric Value
Market Capitalization $232M
Enterprise Value $637M
Trailing P/E 0.00
Forward P/E 0.00
Trailing EV/EBITDA 9.95
Current Dividend Yield 0.00%
Dividend Growth Rate (5Y) 0.00%
Debt-to-Equity Ratio 2.99

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) 100% $98.83
Weighted Average 100% $329.43

Investment Conclusion

Based on our comprehensive valuation analysis, Skyline Investments Inc's weighted average intrinsic value is $329.43, which is approximately 75.7% below the current market price of $1355.00.

Key investment considerations:

  • Strong projected earnings growth (-48% to -27% margin)
  • Consistent cash flow generation

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