As of May 29, 2025, Trez Capital Senior Mortgage Investment Corp's estimated intrinsic value ranges from $0.61 to $5.73 per share, depending on the valuation methodology applied.
| Valuation Method | Fair Value (USD) | Implied Upside/Downside |
|---|---|---|
| Discounted Cash Flow (10Y) | $0.63 | -68.3% |
| Discounted Cash Flow (5Y) | $0.61 | -69.7% |
| Dividend Discount Model (Multi-Stage) | $4.17 | +108.3% |
| Dividend Discount Model (Stable) | $5.73 | +186.6% |
| Earnings Power Value | $1.81 | -9.6% |
Is Trez Capital Senior Mortgage Investment Corp (TZS.TO) undervalued or overvalued?
With the current market price at $2.00, the stock appears to be moderately undervalued.
Intrinsic value represents the "true" worth of a company based on its fundamentals rather than market sentiment. We've employed multiple methodologies to triangulate Trez Capital Senior Mortgage Investment Corp's intrinsic value, including:
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 | 1.19 | 1.3 |
| Cost of equity | 9.0% | 11.8% |
| Cost of debt | 5.0% | 5.0% |
| Tax rate | 26.5% | 26.5% |
| Debt/Equity ratio | 1 | 1 |
| After-tax WACC | 6.3% | 7.7% |
Our DCF model projects cash flows over 5-year and 10-year horizons, with the following key assumptions:
| DCF Model | Fair Value | Enterprise Value | % from Terminal Value |
|---|---|---|---|
| 5-Year Growth | $1 | $2M | 72.8% |
| 10-Year Growth | $1 | $3M | 54.4% |
| 5-Year EBITDA | $2 | $12M | 94.9% |
| 10-Year EBITDA | $2 | $11M | 89.0% |
The DDM values a company based on its expected future dividend payments. We used two approaches:
EPV assesses a company's value based on its current normalized earnings power, assuming no growth.
| EPV Component | Value |
|---|---|
| Normalized Earnings | $1M |
| Discount Rate (WACC) | 7.7% - 6.3% |
| Enterprise Value | $10M - $12M |
| Net Debt | $(2)M |
| Equity Value | $12M - $14M |
| Outstanding Shares | 7M |
| Fair Value | $2 - $2 |
| Selected Fair Value | $1.81 |
| Metric | Value |
|---|---|
| Market Capitalization | $15M |
| Enterprise Value | $13M |
| Trailing P/E | 3.00 |
| Forward P/E | 6.54 |
| Trailing EV/EBITDA | 15.70 |
| Current Dividend Yield | 8190.00% |
| Dividend Growth Rate (5Y) | -18.64% |
| Debt-to-Equity Ratio | 1.04 |
To determine the most reliable intrinsic value estimate, we weigh each valuation method based on:
| Valuation Method | Weight | Weighted Value |
|---|---|---|
| Discounted Cash Flow (10Y) | 30% | $0.19 |
| Discounted Cash Flow (5Y) | 25% | $0.15 |
| Dividend Discount Model (Multi-Stage) | 20% | $0.83 |
| Dividend Discount Model (Stable) | 15% | $0.86 |
| Earnings Power Value | 10% | $0.18 |
| Weighted Average | 100% | $2.21 |
Based on our comprehensive valuation analysis, Trez Capital Senior Mortgage Investment Corp's weighted average intrinsic value is $2.21, which is approximately 10.7% above the current market price of $2.00.
Key investment considerations:
Given these factors, we believe Trez Capital Senior Mortgage Investment Corp is currently moderately undervalued with the potential for long-term appreciation based on the company's growth trajectory and financial strength.