As of May 22, 2025, Telecom Plus PLC's estimated intrinsic value ranges from $1342.89 to $1908.61 per share, depending on the valuation methodology applied.
| Valuation Method | Fair Value (USD) | Implied Upside/Downside |
|---|---|---|
| Discounted Cash Flow (10Y) | $1717.58 | -15.2% |
| Discounted Cash Flow (5Y) | $1342.89 | -33.7% |
| Dividend Discount Model (Multi-Stage) | $1480.18 | -26.9% |
| Dividend Discount Model (Stable) | $1908.61 | -5.7% |
| Earnings Power Value | $1395.62 | -31.1% |
Is Telecom Plus PLC (TEP.L) undervalued or overvalued?
With the current market price at $2025.00, 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 Telecom Plus 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 | 4.0% | 4.5% |
| Equity market risk premium | 6.0% | 7.0% |
| Adjusted beta | 0.51 | 0.55 |
| Cost of equity | 7.0% | 8.8% |
| Cost of debt | 4.5% | 4.7% |
| Tax rate | 25.6% | 25.8% |
| Debt/Equity ratio | 0.11 | 0.11 |
| After-tax WACC | 6.7% | 8.3% |
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 | $1,343 | $1,171M | 79.0% |
| 10-Year Growth | $1,718 | $1,466M | 67.3% |
| 5-Year EBITDA | $596 | $583M | 57.8% |
| 10-Year EBITDA | $907 | $828M | 42.2% |
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 | $90M |
| Discount Rate (WACC) | 8.3% - 6.7% |
| Enterprise Value | $1,080M - $1,345M |
| Net Debt | $115M |
| Equity Value | $966M - $1,230M |
| Outstanding Shares | 1M |
| Fair Value | $1,227 - $1,564 |
| Selected Fair Value | $1395.62 |
| Metric | Value |
|---|---|
| Market Capitalization | $1593M |
| Enterprise Value | $1708M |
| Trailing P/E | 21.16 |
| Forward P/E | 27.05 |
| Trailing EV/EBITDA | 3.95 |
| Current Dividend Yield | 417.72% |
| Dividend Growth Rate (5Y) | 11.40% |
| Debt-to-Equity Ratio | 0.11 |
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% | $515.27 |
| Discounted Cash Flow (5Y) | 25% | $335.72 |
| Dividend Discount Model (Multi-Stage) | 20% | $296.04 |
| Dividend Discount Model (Stable) | 15% | $286.29 |
| Earnings Power Value | 10% | $139.56 |
| Weighted Average | 100% | $1572.88 |
Based on our comprehensive valuation analysis, Telecom Plus PLC's weighted average intrinsic value is $1572.88, which is approximately 22.3% below the current market price of $2025.00.
Key investment considerations:
Given these factors, we believe Telecom Plus PLC is currently significantly overvalued with the potential for long-term appreciation based on the company's growth trajectory and financial strength.