As of June 18, 2025, Sopra Steria Group SA's estimated intrinsic value ranges from $145.91 to $371.54 per share, depending on the valuation methodology applied.
| Valuation Method | Fair Value (USD) | Implied Upside/Downside |
|---|---|---|
| Discounted Cash Flow (10Y) | $266.42 | +28.7% |
| Discounted Cash Flow (5Y) | $229.58 | +10.9% |
| Dividend Discount Model (Multi-Stage) | $167.67 | -19.0% |
| Dividend Discount Model (Stable) | $145.91 | -29.5% |
| Earnings Power Value | $371.54 | +79.5% |
Is Sopra Steria Group SA (SOP.PA) undervalued or overvalued?
With the current market price at $207.00, the stock appears to be moderately undervalued.
Intrinsic value represents the "true" worth of a company based on its fundamentals rather than market sentiment. We've employed multiple methodologies to triangulate Sopra Steria Group SA'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 | 3.0% | 3.5% |
| Equity market risk premium | 5.8% | 6.8% |
| Adjusted beta | 0.91 | 1.03 |
| Cost of equity | 8.3% | 11.0% |
| Cost of debt | 4.0% | 4.5% |
| Tax rate | 28.1% | 31.6% |
| Debt/Equity ratio | 0.3 | 0.3 |
| After-tax WACC | 7.1% | 9.2% |
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 | $230 | $5,527M | 75.0% |
| 10-Year Growth | $266 | $6,284M | 58.1% |
| 5-Year EBITDA | $180 | $4,514M | 69.3% |
| 10-Year EBITDA | $224 | $5,421M | 51.5% |
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 | $674M |
| Discount Rate (WACC) | 9.2% - 7.1% |
| Enterprise Value | $7,328M - $9,560M |
| Net Debt | $809M |
| Equity Value | $6,519M - $8,751M |
| Outstanding Shares | 21M |
| Fair Value | $317 - $426 |
| Selected Fair Value | $371.54 |
| Metric | Value |
|---|---|
| Market Capitalization | $4254M |
| Enterprise Value | $5063M |
| Trailing P/E | 16.95 |
| Forward P/E | 13.90 |
| Trailing EV/EBITDA | 6.70 |
| Current Dividend Yield | 229.85% |
| Dividend Growth Rate (5Y) | 20.50% |
| Debt-to-Equity Ratio | 0.30 |
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% | $79.93 |
| Discounted Cash Flow (5Y) | 25% | $57.40 |
| Dividend Discount Model (Multi-Stage) | 20% | $33.53 |
| Dividend Discount Model (Stable) | 15% | $21.89 |
| Earnings Power Value | 10% | $37.15 |
| Weighted Average | 100% | $229.90 |
Based on our comprehensive valuation analysis, Sopra Steria Group SA's weighted average intrinsic value is $229.90, which is approximately 11.1% above the current market price of $207.00.
Key investment considerations:
Given these factors, we believe Sopra Steria Group SA is currently moderately undervalued with the potential for long-term appreciation based on the company's growth trajectory and financial strength.