Storagevault Canada Inc (SVI.TO) Intrinsic Value Analysis

Executive Summary

As of May 27, 2025, Storagevault Canada Inc's estimated intrinsic value ranges from $3.35 to $5.14 per share, depending on the valuation methodology applied.

Valuation Method	Fair Value (USD)	Implied Upside/Downside
Discounted Cash Flow (10Y)	$5.14	+35.5%
Discounted Cash Flow (5Y)	$3.35	-11.6%
Earnings Power Value	$4.29	+13.2%

Is Storagevault Canada Inc (SVI.TO) undervalued or overvalued?

With the current market price at $3.79, the stock appears to be moderately 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 Storagevault Canada Inc's intrinsic value, including:

1. Discounted Cash Flow (DCF): Values the company based on projected future cash flows
2. 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	3.2%	3.7%
Equity market risk premium	5.1%	6.1%
Adjusted beta	0.49	0.65
Cost of equity	5.7%	8.1%
Cost of debt	4.0%	4.6%
Tax rate	21.4%	23.7%
Debt/Equity ratio	1.47	1.47
After-tax WACC	4.2%	5.4%

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: 5-year DCF and 10-year DCF
• Terminal Growth Rate: 0.0% (range: 3.0% - 5.0%)
• Discount Rate: 4.8% (range: 0.0% - 9.3%)

Key Projections:

• Revenue growth from $305 (FY12-2024) to $587 (FY12-2034)
• Net profit margin expansion from -10% to -7%
• Capital expenditures maintained at approximately 19% of revenue

DCF Model	Fair Value	Enterprise Value	% from Terminal Value
5-Year Growth	$3	$3,293M	88.2%
10-Year Growth	$5	$3,946M	78.9%
5-Year EBITDA	$3	$3,076M	87.4%
10-Year EBITDA	$5	$3,745M	77.8%

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	$171M
Discount Rate (WACC)	5.4% - 4.2%
Enterprise Value	$3,173M - $4,100M
Net Debt	$2,069M
Equity Value	$1,104M - $2,031M
Outstanding Shares	366M
Fair Value	$3 - $6
Selected Fair Value	$4.29

Key Financial Metrics

Metric	Value
Market Capitalization	$1385M
Enterprise Value	$3454M
Trailing P/E	0.00
Forward P/E	0.00
Trailing EV/EBITDA	20.00
Current Dividend Yield	17.70%
Dividend Growth Rate (5Y)	1.26%
Debt-to-Equity Ratio	1.47

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)	46%	$1.54
Discounted Cash Flow (5Y)	38%	$0.84
Earnings Power Value	15%	$0.43
Weighted Average	100%	$4.32

Investment Conclusion

Based on our comprehensive valuation analysis, Storagevault Canada Inc's weighted average intrinsic value is $4.32, which is approximately 13.9% above the current market price of $3.79.

Key investment considerations:

• Strong projected earnings growth (-10% to -7% margin)
• Consistent cash flow generation
• Historical dividend growth of 1.26%

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