What is TUNG.L's Intrinsic value?

Tungsten Corp PLC (TUNG.L) Intrinsic Value Analysis

Executive Summary

As of June 19, 2025, Tungsten Corp PLC's estimated intrinsic value ranges from $40.60 to $40.60 per share, depending on the valuation methodology applied.

Valuation Method Fair Value (USD) Implied Upside/Downside
Earnings Power Value $40.60 -25.6%

Is Tungsten Corp PLC (TUNG.L) undervalued or overvalued?

With the current market price at $54.60, 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 Tungsten Corp PLC's intrinsic value, including:

  1. 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 2.9% 3.4%
Equity market risk premium 5.3% 6.3%
Adjusted beta 0.65 0.78
Cost of equity 6.4% 8.9%
Cost of debt 7.0% 7.0%
Tax rate 2.1% 4.5%
Debt/Equity ratio 0.11 0.11
After-tax WACC 6.5% 8.7%

Valuation Methods

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 $4M
Discount Rate (WACC) 8.7% - 6.5%
Enterprise Value $44M - $58M
Net Debt $(1)M
Equity Value $44M - $59M
Outstanding Shares 1M
Fair Value $35 - $46
Selected Fair Value $40.60

Key Financial Metrics

Metric Value
Market Capitalization $70M
Enterprise Value $69M
Trailing P/E 0.00
Forward P/E 0.00
Trailing EV/EBITDA 8.25
Current Dividend Yield 0.00%
Dividend Growth Rate (5Y) 0.00%
Debt-to-Equity Ratio 0.11

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
Earnings Power Value 100% $4.06
Weighted Average 100% $40.60

Investment Conclusion

Based on our comprehensive valuation analysis, Tungsten Corp PLC's weighted average intrinsic value is $40.60, which is approximately 25.6% below the current market price of $54.60.

Key investment considerations:

  • Strong projected earnings growth (-96% to -93% margin)
  • Consistent cash flow generation
  • Conservative capital structure (Debt/Equity of 0.11)

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