What is SLE.L's Intrinsic value?

San Leon Energy PLC (SLE.L) Intrinsic Value Analysis

Executive Summary

As of December 15, 2025, San Leon Energy PLC's estimated intrinsic value ranges from $150.58 to $290135.66 per share, depending on the valuation methodology applied.

Valuation Method Fair Value (USD) Implied Upside/Downside
Dividend Discount Model (Multi-Stage) $290135.66 +1758297.9%
Dividend Discount Model (Stable) $150.58 +812.6%

Is San Leon Energy PLC (SLE.L) undervalued or overvalued?

With the current market price at $16.50, 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 San Leon Energy PLC'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 4.0% 4.5%
Equity market risk premium 6.0% 7.0%
Adjusted beta 0.43 0.49
Cost of equity 6.6% 8.4%
Cost of debt 7.0% 7.0%
Tax rate 15.3% 23.6%
Debt/Equity ratio 0.03 0.03
After-tax WACC 6.6% 8.3%

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: 7.5%
  • Long-term growth rate: 4.0%
  • Fair value: $290135.66 (1758297.9% from current price)

Stable DDM:

  • Stable payout ratio: 70% (Low) to 90% (High)
  • Cost of equity: 8.4% (Low) to 6.6% (High)
  • Long-term growth rate: 3.0% (Low) to 5.0% (High)
  • Fair value range: $75 to $328
  • Selected fair value: $150.58 (812.6% from current price)

Key Financial Metrics

Metric Value
Market Capitalization $67M
Enterprise Value $69M
Trailing P/E 3.81
Forward P/E 0.45
Trailing EV/EBITDA 8.75
Current Dividend Yield 0.00%
Dividend Growth Rate (5Y) 0.00%
Debt-to-Equity Ratio 0.03

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 (Multi-Stage) 57% $58027.13
Dividend Discount Model (Stable) 43% $22.59
Weighted Average 100% $165856.34

Investment Conclusion

Based on our comprehensive valuation analysis, San Leon Energy PLC's intrinsic value is $165856.34, which is approximately 1005089.9% above the current market price of $16.50.

Key investment considerations:

  • Strong projected earnings growth (708% to 553% margin)
  • Consistent cash flow generation
  • Conservative capital structure (Debt/Equity of 0.03)

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