What is SNMP's Intrinsic value?

Evolve Transition Infrastructure LP (SNMP) Intrinsic Value Analysis

Executive Summary

As of June 9, 2025, Evolve Transition Infrastructure LP's estimated intrinsic value ranges from $88.89 to $88.89 per share, depending on the valuation methodology applied.

Valuation Method Fair Value (USD) Implied Upside/Downside
Earnings Power Value $88.89 +6583.3%

Is Evolve Transition Infrastructure LP (SNMP) undervalued or overvalued?

With the current market price at $1.33, 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 Evolve Transition Infrastructure LP's intrinsic value, including:

  1. Earnings Power Value (EPV): Values the company based on its current earnings power, assuming no growth

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 0.41 0.54
Cost of equity 5.8% 7.9%
Cost of debt 4.0% 7.0%
Tax rate 0.2% 0.3%
Debt/Equity ratio 1.77 1.77
After-tax WACC 4.6% 7.3%

Valuation Methods

3. Earnings Power Value (EPV)

EPV assesses a company's value based on its current normalized earnings power, assuming no growth.

EPV Component Value
Normalized Earnings $43M
Discount Rate (WACC) 7.3% - 4.6%
Enterprise Value $594M - $937M
Net Debt $16M
Equity Value $578M - $921M
Outstanding Shares 8M
Fair Value $69 - $109
Selected Fair Value $88.89

Key Financial Metrics

Metric Value
Market Capitalization $11M
Enterprise Value $27M
Trailing P/E 0.00
Forward P/E -0.20
Trailing EV/EBITDA 3.75
Current Dividend Yield 0.00%
Dividend Growth Rate (5Y) 25.93%
Debt-to-Equity Ratio 1.77

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
Earnings Power Value 100% $8.89
Weighted Average 100% $88.89

Investment Conclusion

Based on our comprehensive valuation analysis, Evolve Transition Infrastructure LP's weighted average intrinsic value is $88.89, which is approximately 6583.3% above the current market price of $1.33.

Key investment considerations:

  • Strong projected earnings growth (-147% to -141% margin)
  • Consistent cash flow generation
  • Historical dividend growth of 25.93%

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