As of June 8, 2025, SNC-Lavalin Group Inc's estimated intrinsic value ranges from $1.12 to $66.84 per share, depending on the valuation methodology applied.
| Valuation Method | Fair Value (USD) | Implied Upside/Downside |
|---|---|---|
| Discounted Cash Flow (10Y) | $66.84 | +53.9% |
| Discounted Cash Flow (5Y) | $46.33 | +6.7% |
| Dividend Discount Model (Multi-Stage) | $42.71 | -1.6% |
| Dividend Discount Model (Stable) | $1.12 | -97.4% |
| Earnings Power Value | $18.48 | -57.4% |
Is SNC-Lavalin Group Inc (SNC.TO) undervalued or overvalued?
With the current market price at $43.42, the stock appears to be fairly valued.
Intrinsic value represents the "true" worth of a company based on its fundamentals rather than market sentiment. We've employed multiple methodologies to triangulate SNC-Lavalin Group Inc'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 | 3.6% | 4.1% |
| Equity market risk premium | 5.5% | 6.5% |
| Adjusted beta | 0.95 | 1.09 |
| Cost of equity | 8.8% | 11.6% |
| Cost of debt | 4.7% | 9.6% |
| Tax rate | 24.0% | 47.8% |
| Debt/Equity ratio | 0.47 | 0.47 |
| After-tax WACC | 7.1% | 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 | $46 | $8,024M | 83.4% |
| 10-Year Growth | $67 | $10,577M | 69.1% |
| 5-Year EBITDA | $52 | $8,711M | 84.7% |
| 10-Year EBITDA | $65 | $10,361M | 68.5% |
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 | $372M |
| Discount Rate (WACC) | 9.5% - 7.1% |
| Enterprise Value | $3,908M - $5,209M |
| Net Debt | $2,259M |
| Equity Value | $1,649M - $2,950M |
| Outstanding Shares | 124M |
| Fair Value | $13 - $24 |
| Selected Fair Value | $18.48 |
| Metric | Value |
|---|---|
| Market Capitalization | $5403M |
| Enterprise Value | $7662M |
| Trailing P/E | 554.13 |
| Forward P/E | 57.14 |
| Trailing EV/EBITDA | 13.30 |
| Current Dividend Yield | 26.33% |
| Dividend Growth Rate (5Y) | -48.62% |
| Debt-to-Equity Ratio | 0.47 |
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% | $20.05 |
| Discounted Cash Flow (5Y) | 25% | $11.58 |
| Dividend Discount Model (Multi-Stage) | 20% | $8.54 |
| Dividend Discount Model (Stable) | 15% | $0.17 |
| Earnings Power Value | 10% | $1.85 |
| Weighted Average | 100% | $42.19 |
Based on our comprehensive valuation analysis, SNC-Lavalin Group Inc's weighted average intrinsic value is $42.19, which is approximately 2.8% below the current market price of $43.42.
Key investment considerations:
Given these factors, we believe SNC-Lavalin Group Inc is currently fairly valued with the potential for long-term appreciation based on the company's growth trajectory and financial strength.