As of June 20, 2025, Sumo Group PLC's estimated intrinsic value ranges from $35.23 to $283.09 per share, depending on the valuation methodology applied.
| Valuation Method | Fair Value (USD) | Implied Upside/Downside |
|---|---|---|
| Discounted Cash Flow (10Y) | $273.50 | -46.6% |
| Discounted Cash Flow (5Y) | $35.23 | -93.1% |
| Dividend Discount Model (Multi-Stage) | $184.99 | -63.9% |
| Dividend Discount Model (Stable) | $283.09 | -44.7% |
| Earnings Power Value | $178.08 | -65.2% |
Is Sumo Group PLC (SUMO.L) undervalued or overvalued?
With the current market price at $512.00, the stock appears to be significantly overvalued.
Intrinsic value represents the "true" worth of a company based on its fundamentals rather than market sentiment. We've employed multiple methodologies to triangulate Sumo Group PLC'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 | 2.9% | 3.4% |
| Equity market risk premium | 5.3% | 6.3% |
| Adjusted beta | 0.64 | 0.68 |
| Cost of equity | 6.4% | 8.2% |
| Cost of debt | 4.0% | 4.5% |
| Tax rate | 26.6% | 36.5% |
| Debt/Equity ratio | 0.02 | 0.02 |
| After-tax WACC | 6.3% | 8.1% |
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 | $35 | $69M | 100.5% |
| 10-Year Growth | $274 | $478M | 87.6% |
| 5-Year EBITDA | $67 | $123M | 100.3% |
| 10-Year EBITDA | $166 | $294M | 79.9% |
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 | $22M |
| Discount Rate (WACC) | 8.1% - 6.3% |
| Enterprise Value | $274M - $354M |
| Net Debt | $9M |
| Equity Value | $265M - $345M |
| Outstanding Shares | 2M |
| Fair Value | $155 - $201 |
| Selected Fair Value | $178.08 |
| Metric | Value |
|---|---|
| Market Capitalization | $878M |
| Enterprise Value | $887M |
| Trailing P/E | 72.35 |
| Forward P/E | 311.61 |
| Trailing EV/EBITDA | 5.20 |
| Current Dividend Yield | 0.00% |
| Dividend Growth Rate (5Y) | 0.00% |
| Debt-to-Equity Ratio | 0.02 |
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% | $82.05 |
| Discounted Cash Flow (5Y) | 25% | $8.81 |
| Dividend Discount Model (Multi-Stage) | 20% | $37.00 |
| Dividend Discount Model (Stable) | 15% | $42.46 |
| Earnings Power Value | 10% | $17.81 |
| Weighted Average | 100% | $188.13 |
Based on our comprehensive valuation analysis, Sumo Group PLC's weighted average intrinsic value is $188.13, which is approximately 63.3% below the current market price of $512.00.
Key investment considerations:
Given these factors, we believe Sumo Group PLC is currently significantly overvalued with the potential for long-term appreciation based on the company's growth trajectory and financial strength.