As of December 15, 2025, Trican Well Service Ltd's estimated intrinsic value ranges from $5.99 to $9.45 per share, depending on the valuation methodology applied.
| Valuation Method | Fair Value (USD) | Implied Upside/Downside |
|---|---|---|
| Discounted Cash Flow (10Y) | $9.45 | +61.0% |
| Discounted Cash Flow (5Y) | $7.46 | +27.1% |
| Dividend Discount Model (Multi-Stage) | $7.00 | +19.2% |
| Dividend Discount Model (Stable) | $5.99 | +2.1% |
| Earnings Power Value | $6.62 | +12.7% |
Is Trican Well Service Ltd (TCW.TO) undervalued or overvalued?
With the current market price at $5.87, the stock appears to be significantly 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 Trican Well Service Ltd'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 | 3.2% | 3.7% |
| Equity market risk premium | 5.1% | 6.1% |
| Adjusted beta | 0.77 | 0.95 |
| Cost of equity | 7.1% | 9.9% |
| Cost of debt | 4.0% | 13.2% |
| Tax rate | 19.2% | 24.2% |
| Debt/Equity ratio | 0.02 | 0.02 |
| After-tax WACC | 7.0% | 9.9% |
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 | $7 | $1,733M | 72.0% |
| 10-Year Growth | $9 | $2,154M | 54.6% |
| 5-Year EBITDA | $6 | $1,506M | 67.8% |
| 10-Year EBITDA | $8 | $1,929M | 49.3% |
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 | $128M |
| Discount Rate (WACC) | 9.9% - 7.0% |
| Enterprise Value | $1,291M - $1,820M |
| Net Debt | $157M |
| Equity Value | $1,134M - $1,663M |
| Outstanding Shares | 211M |
| Fair Value | $5 - $8 |
| Selected Fair Value | $6.62 |
| Metric | Value |
|---|---|
| Market Capitalization | $1241M |
| Enterprise Value | $1397M |
| Trailing P/E | 11.51 |
| Forward P/E | 10.45 |
| Trailing EV/EBITDA | 5.20 |
| Current Dividend Yield | 310.16% |
| Dividend Growth Rate (5Y) | -9.83% |
| 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% | $2.84 |
| Discounted Cash Flow (5Y) | 25% | $1.86 |
| Dividend Discount Model (Multi-Stage) | 20% | $1.40 |
| Dividend Discount Model (Stable) | 15% | $0.90 |
| Earnings Power Value | 10% | $0.66 |
| Weighted Average | 100% | $7.66 |
Based on our comprehensive valuation analysis, Trican Well Service Ltd's intrinsic value is $7.66, which is approximately 30.5% above the current market price of $5.87.
Key investment considerations:
Given these factors, we believe Trican Well Service Ltd is currently significantly undervalued with the potential for long-term appreciation based on the company's growth trajectory and financial strength.