What is TOASO.IS's Intrinsic value?

Tofas Turk Otomobil Fabrikasi AS (TOASO.IS) Intrinsic Value Analysis

Executive Summary

As of June 18, 2025, Tofas Turk Otomobil Fabrikasi AS's estimated intrinsic value ranges from $0.00 to $36.01 per share, depending on the valuation methodology applied.

Valuation Method Fair Value (USD) Implied Upside/Downside
Dividend Discount Model (Multi-Stage) $0.00 -100.0%
Dividend Discount Model (Stable) $36.01 -57.0%
Earnings Power Value $7.57 -91.0%

Is Tofas Turk Otomobil Fabrikasi AS (TOASO.IS) undervalued or overvalued?

With the current market price at $83.75, the stock appears to be significantly overvalued.

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 Tofas Turk Otomobil Fabrikasi AS's intrinsic value, including:

  1. Dividend Discount Model (DDM): Values the company based on expected future dividend payments
  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 21.4% 21.9%
Equity market risk premium 10.2% 11.2%
Adjusted beta 0.63 0.82
Cost of equity 27.8% 31.5%
Cost of debt 4.0% 22.0%
Tax rate 2.9% 3.6%
Debt/Equity ratio 0.34 0.34
After-tax WACC 21.7% 28.9%

Valuation Methods

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: 57.0%
  • Stable payout ratio: 90.0%
  • Growth transition: 5 years
  • Cost of equity: 29.6%
  • Long-term growth rate: 4.0%
  • Fair value: $0.00 (-100.0% from current price)

Stable DDM:

  • Stable payout ratio: 70% (Low) to 90% (High)
  • Cost of equity: 31.5% (Low) to 27.8% (High)
  • Long-term growth rate: 3.0% (Low) to 5.0% (High)
  • Fair value range: $28 to $44
  • Selected fair value: $36.01 (-57.0% 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 $1,683M
Discount Rate (WACC) 28.9% - 21.7%
Enterprise Value $5,824M - $7,762M
Net Debt $5,019M
Equity Value $805M - $2,743M
Outstanding Shares 234M
Fair Value $3 - $12
Selected Fair Value $7.57

Key Financial Metrics

Metric Value
Market Capitalization $19631M
Enterprise Value $24649M
Trailing P/E 7.45
Forward P/E 361573600000.00
Trailing EV/EBITDA 4.40
Current Dividend Yield 764.10%
Dividend Growth Rate (5Y) 34.65%
Debt-to-Equity Ratio 0.34

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
Dividend Discount Model (Multi-Stage) 44% $0.00
Dividend Discount Model (Stable) 33% $5.40
Earnings Power Value 22% $0.76
Weighted Average 100% $13.68

Investment Conclusion

Based on our comprehensive valuation analysis, Tofas Turk Otomobil Fabrikasi AS's weighted average intrinsic value is $13.68, which is approximately 83.7% below the current market price of $83.75.

Key investment considerations:

  • Strong projected earnings growth (8% to 0% margin)
  • Historical dividend growth of 34.65%

Given these factors, we believe Tofas Turk Otomobil Fabrikasi AS is currently significantly overvalued with the potential for long-term appreciation based on the company's growth trajectory and financial strength.