What is SMGI's Intrinsic value?

SMG Industries Inc (SMGI) Intrinsic Value Analysis

Executive Summary

As of June 2, 2025, SMG Industries Inc's estimated intrinsic value ranges from $0.74 to $0.74 per share, depending on the valuation methodology applied.

Valuation Method Fair Value (USD) Implied Upside/Downside
Discounted Cash Flow (10Y) $0.74 +36665.8%

Is SMG Industries Inc (SMGI) undervalued or overvalued?

With the current market price at $0.00, 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 SMG Industries 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 3.9% 4.4%
Equity market risk premium 4.6% 5.6%
Adjusted beta 32.69 63.24
Cost of equity 154.2% 359.0%
Cost of debt 7.0% 22.6%
Tax rate 26.2% 27.0%
Debt/Equity ratio 132.25 132.25
After-tax WACC 6.3% 19.1%

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: 12.7% (range: 0.0% - 9.3%)

Key Projections:

  • Revenue growth from $71 (FY12-2022) to $637 (FY12-2032)
  • Net profit margin expansion from -17% to -6%
  • Capital expenditures maintained at approximately 3% of revenue
DCF Model Fair Value Enterprise Value % from Terminal Value
5-Year Growth $(1,234) $29M 86.2%
10-Year Growth $1 $156M 62.1%
5-Year EBITDA $0 $53M 92.5%
10-Year EBITDA $1 $146M 59.5%

Key Financial Metrics

Metric Value
Market Capitalization $0M
Enterprise Value $43M
Trailing P/E 0.00
Forward P/E 0.00
Trailing EV/EBITDA 5.55
Current Dividend Yield 0.00%
Dividend Growth Rate (5Y) 0.00%
Debt-to-Equity Ratio 132.25

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% $0.22
Weighted Average 100% $0.74

Investment Conclusion

Based on our comprehensive valuation analysis, SMG Industries Inc's weighted average intrinsic value is $0.74, which is approximately 36665.8% above the current market price of $0.00.

Key investment considerations:

  • Strong projected earnings growth (-17% to -6% margin)
  • Consistent cash flow generation

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