What is TRX.L's Intrinsic value?

Tissue Regenix Group PLC (TRX.L) Intrinsic Value Analysis

Executive Summary

As of June 12, 2025, Tissue Regenix Group PLC's estimated intrinsic value ranges from $12.00 to $74.98 per share, depending on the valuation methodology applied.

Valuation Method Fair Value (USD) Implied Upside/Downside
Discounted Cash Flow (10Y) $74.98 +120.5%
Discounted Cash Flow (5Y) $12.00 -64.7%
Dividend Discount Model (Multi-Stage) $65.27 +92.0%

Is Tissue Regenix Group PLC (TRX.L) undervalued or overvalued?

With the current market price at $34.00, 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 Tissue Regenix Group PLC'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

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 4.0% 4.5%
Equity market risk premium 6.0% 7.0%
Adjusted beta 0.32 0.39
Cost of equity 5.9% 7.7%
Cost of debt 12.1% 21.0%
Tax rate 4.3% 6.0%
Debt/Equity ratio 0.41 0.41
After-tax WACC 7.6% 11.2%

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: 9.4% (range: 0.0% - 9.3%)

Key Projections:

  • Revenue growth from $29 (FY12-2023) to $94 (FY12-2033)
  • Net profit margin expansion from -6% to 8%
  • Capital expenditures maintained at approximately 7% of revenue
DCF Model Fair Value Enterprise Value % from Terminal Value
5-Year Growth $12 $16M 94.1%
10-Year Growth $75 $61M 79.4%
5-Year EBITDA $71 $59M 98.4%
10-Year EBITDA $130 $101M 87.5%

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: 0.0%
  • Stable payout ratio: 90.0%
  • Growth transition: 5 years
  • Cost of equity: 6.8%
  • Long-term growth rate: 4.0%
  • Fair value: $65.27 (92.0% from current price)

Stable DDM:

  • Stable payout ratio: 70% (Low) to 90% (High)
  • Cost of equity: 7.7% (Low) to 5.9% (High)
  • Long-term growth rate: 3.0% (Low) to 5.0% (High)
  • Fair value range: $(22) to $(148)
  • Selected fair value: $-84.99 (-350.0% from current price)

Key Financial Metrics

Metric Value
Market Capitalization $25M
Enterprise Value $32M
Trailing P/E 0.00
Forward P/E 0.00
Trailing EV/EBITDA 14.20
Current Dividend Yield 0.00%
Dividend Growth Rate (5Y) 0.00%
Debt-to-Equity Ratio 0.41

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) 40% $22.49
Discounted Cash Flow (5Y) 33% $3.00
Dividend Discount Model (Multi-Stage) 27% $13.05
Weighted Average 100% $51.40

Investment Conclusion

Based on our comprehensive valuation analysis, Tissue Regenix Group PLC's weighted average intrinsic value is $51.40, which is approximately 51.2% above the current market price of $34.00.

Key investment considerations:

  • Strong projected earnings growth (-6% to 8% margin)
  • Consistent cash flow generation

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