What is TERB.BR's Intrinsic value?

Ter Beke NV (TERB.BR) Intrinsic Value Analysis

Executive Summary

As of June 15, 2025, Ter Beke NV's estimated intrinsic value ranges from $60.94 to $350.05 per share, depending on the valuation methodology applied.

Valuation Method Fair Value (USD) Implied Upside/Downside
Discounted Cash Flow (10Y) $111.10 +52.2%
Discounted Cash Flow (5Y) $88.01 +20.6%
Dividend Discount Model (Multi-Stage) $79.86 +9.4%
Dividend Discount Model (Stable) $60.94 -16.5%
Earnings Power Value $350.05 +379.5%

Is Ter Beke NV (TERB.BR) undervalued or overvalued?

With the current market price at $73.00, the stock appears to be significantly 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 Ter Beke NV's intrinsic value, including:

  1. Discounted Cash Flow (DCF): Values the company based on projected future cash flows
  2. Dividend Discount Model (DDM): Values the company based on expected future dividend payments
  3. 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 6.4% 7.4%
Adjusted beta 0.54 0.65
Cost of equity 6.6% 9.0%
Cost of debt 4.0% 4.7%
Tax rate 25.0% 25.0%
Debt/Equity ratio 0.66 0.66
After-tax WACC 5.2% 6.9%

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: 6.0% (range: 0.0% - 9.3%)

Key Projections:

  • Revenue growth from $781 (FY12-2022) to $2,049 (FY12-2032)
  • Net profit margin expansion from 1% to 1%
  • Capital expenditures maintained at approximately 2% of revenue
DCF Model Fair Value Enterprise Value % from Terminal Value
5-Year Growth $88 $235M 85.4%
10-Year Growth $111 $277M 77.6%
5-Year EBITDA $85 $229M 85.0%
10-Year EBITDA $110 $275M 77.4%

2. Dividend Discount Model (DDM)

The DDM values a company based on its expected future dividend payments. We used two approaches:

Multi-Stage DDM:

  • Current payout ratio: 170.0%
  • Stable payout ratio: 90.0%
  • Growth transition: 5 years
  • Cost of equity: 7.8%
  • Long-term growth rate: 3.5%
  • Fair value: $79.86 (9.4% from current price)

Stable DDM:

  • Stable payout ratio: 70% (Low) to 90% (High)
  • Cost of equity: 9.0% (Low) to 6.6% (High)
  • Long-term growth rate: 2.5% (Low) to 4.5% (High)
  • Fair value range: $25 to $97
  • Selected fair value: $60.94 (-16.5% from current price)

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 $42M
Discount Rate (WACC) 6.9% - 5.2%
Enterprise Value $614M - $810M
Net Debt $75M
Equity Value $540M - $735M
Outstanding Shares 2M
Fair Value $296 - $404
Selected Fair Value $350.05

Key Financial Metrics

Metric Value
Market Capitalization $133M
Enterprise Value $208M
Trailing P/E 31.49
Forward P/E 23.74
Trailing EV/EBITDA 7.35
Current Dividend Yield 539.89%
Dividend Growth Rate (5Y) 0.88%
Debt-to-Equity Ratio 0.66

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) 30% $33.33
Discounted Cash Flow (5Y) 25% $22.00
Dividend Discount Model (Multi-Stage) 20% $15.97
Dividend Discount Model (Stable) 15% $9.14
Earnings Power Value 10% $35.01
Weighted Average 100% $115.45

Investment Conclusion

Based on our comprehensive valuation analysis, Ter Beke NV's weighted average intrinsic value is $115.45, which is approximately 58.2% above the current market price of $73.00.

Key investment considerations:

  • Strong projected earnings growth (1% to 1% margin)
  • Consistent cash flow generation
  • Historical dividend growth of 0.88%

Given these factors, we believe Ter Beke NV is currently significantly undervalued with the potential for long-term appreciation based on the company's growth trajectory and financial strength.