As of May 22, 2025, Ubisoft Entertainment SA's estimated intrinsic value ranges from $6.87 to $147.29 per share, depending on the valuation methodology applied.
| Valuation Method | Fair Value (USD) | Implied Upside/Downside |
|---|---|---|
| Discounted Cash Flow (10Y) | $16.12 | +56.0% |
| Discounted Cash Flow (5Y) | $13.92 | +34.7% |
| Dividend Discount Model (Multi-Stage) | $6.87 | -33.5% |
| Earnings Power Value | $147.29 | +1325.2% |
Is Ubisoft Entertainment SA (UBI.PA) undervalued or overvalued?
With the current market price at $10.34, the stock appears to be significantly 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 Ubisoft Entertainment SA'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 | 3.0% | 3.5% |
| Equity market risk premium | 5.8% | 6.8% |
| Adjusted beta | 1.3 | 1.65 |
| Cost of equity | 10.6% | 15.3% |
| Cost of debt | 5.0% | 5.0% |
| Tax rate | 25.9% | 27.1% |
| Debt/Equity ratio | 1.98 | 1.98 |
| After-tax WACC | 6.0% | 7.5% |
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 | $14 | $3,228M | 72.6% |
| 10-Year Growth | $16 | $3,516M | 55.1% |
| 5-Year EBITDA | $4 | $1,984M | 55.5% |
| 10-Year EBITDA | $8 | $2,501M | 36.9% |
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 | $1,384M |
| Discount Rate (WACC) | 7.5% - 6.0% |
| Enterprise Value | $18,352M - $23,008M |
| Net Debt | $1,407M |
| Equity Value | $16,945M - $21,601M |
| Outstanding Shares | 131M |
| Fair Value | $130 - $165 |
| Selected Fair Value | $147.29 |
| Metric | Value |
|---|---|
| Market Capitalization | $1352M |
| Enterprise Value | $2759M |
| Trailing P/E | 0.00 |
| Forward P/E | 8.99 |
| Trailing EV/EBITDA | 4.00 |
| Current Dividend Yield | 0.00% |
| Dividend Growth Rate (5Y) | 0.00% |
| Debt-to-Equity Ratio | 1.98 |
To determine the most reliable intrinsic value estimate, we weigh each valuation method based on:
| Valuation Method | Weight | Weighted Value |
|---|---|---|
| Discounted Cash Flow (10Y) | 35% | $4.84 |
| Discounted Cash Flow (5Y) | 29% | $3.48 |
| Dividend Discount Model (Multi-Stage) | 24% | $1.37 |
| Earnings Power Value | 12% | $14.73 |
| Weighted Average | 100% | $28.73 |
Based on our comprehensive valuation analysis, Ubisoft Entertainment SA's weighted average intrinsic value is $28.73, which is approximately 178.0% above the current market price of $10.34.
Key investment considerations:
Given these factors, we believe Ubisoft Entertainment SA is currently significantly undervalued with the potential for long-term appreciation based on the company's growth trajectory and financial strength.