What is TRIL.TO's Intrinsic value?

Trillium Therapeutics Inc (TRIL.TO) Intrinsic Value Analysis

Executive Summary

As of May 27, 2025, Trillium Therapeutics Inc's estimated intrinsic value ranges from $0.79 to $0.79 per share, depending on the valuation methodology applied.

Valuation Method Fair Value (USD) Implied Upside/Downside
Discounted Cash Flow (10Y) $0.79 -96.6%
Discounted Cash Flow (5Y) $0.79 -96.6%

Is Trillium Therapeutics Inc (TRIL.TO) undervalued or overvalued?

With the current market price at $23.33, 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 Trillium Therapeutics Inc's intrinsic value, including:

  1. Discounted Cash Flow (DCF): Values the company based on projected future cash flows

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 3.4% 3.9%
Equity market risk premium 4.7% 5.7%
Adjusted beta 1.85 2.1
Cost of equity 12.1% 16.4%
Cost of debt 5.0% 5.0%
Tax rate 0.1% 0.1%
Debt/Equity ratio 1 1
After-tax WACC 8.6% 10.7%

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: 9.6% (range: 0.0% - 9.3%)

Key Projections:

  • Revenue growth from $0 (FY12-2020) to $0 (FY12-2030)
  • Net profit margin expansion from -39560% to -164%
  • Capital expenditures maintained at approximately 133% of revenue
DCF Model Fair Value Enterprise Value % from Terminal Value
5-Year Growth $1 $(25)M 73.1%
10-Year Growth $1 $(24)M 54.4%
5-Year EBITDA $1 $(12)M 46.0%
10-Year EBITDA $1 $(15)M 27.2%

Key Financial Metrics

Metric Value
Market Capitalization $2607M
Enterprise Value $2479M
Trailing P/E 0.00
Forward P/E 0.00
Trailing EV/EBITDA 5.80
Current Dividend Yield 0.00%
Dividend Growth Rate (5Y) 0.00%
Debt-to-Equity Ratio 1.10

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) 55% $0.24
Discounted Cash Flow (5Y) 45% $0.20
Weighted Average 100% $0.79

Investment Conclusion

Based on our comprehensive valuation analysis, Trillium Therapeutics Inc's weighted average intrinsic value is $0.79, which is approximately 96.6% below the current market price of $23.33.

Key investment considerations:

  • Strong projected earnings growth (-39560% to -164% margin)
  • Consistent cash flow generation

Given these factors, we believe Trillium Therapeutics Inc is currently significantly overvalued with the potential for long-term appreciation based on the company's growth trajectory and financial strength.