What is VAI.CN's Intrinsic value?

VirtualArmour International Inc (VAI.CN) Intrinsic Value Analysis

Executive Summary

As of June 1, 2025, VirtualArmour International Inc's estimated intrinsic value ranges from $0.00 to $0.00 per share, depending on the valuation methodology applied.

Valuation Method Fair Value (USD) Implied Upside/Downside
Discounted Cash Flow (10Y) $0.00 -69.7%
Discounted Cash Flow (5Y) $0.00 -97.9%

Is VirtualArmour International Inc (VAI.CN) undervalued or overvalued?

With the current market price at $0.01, 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 VirtualArmour International 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 0.33 0.36
Cost of equity 5.4% 6.9%
Cost of debt 7.0% 55.4%
Tax rate 26.5% 26.5%
Debt/Equity ratio 0.17 0.17
After-tax WACC 5.4% 11.9%

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: 8.6% (range: 0.0% - 9.3%)

Key Projections:

  • Revenue growth from $10 (FY12-2020) to $24 (FY12-2030)
  • Net profit margin expansion from -13% to -6%
  • Capital expenditures maintained at approximately 1% of revenue
DCF Model Fair Value Enterprise Value % from Terminal Value
5-Year Growth $0 $2M 134.1%
10-Year Growth $0 $3M 85.8%
5-Year EBITDA $(1,234) $(1)M 6.3%
10-Year EBITDA $(1,234) $1M 10.8%

Key Financial Metrics

Metric Value
Market Capitalization $8M
Enterprise Value $10M
Trailing P/E 0.00
Forward P/E 0.00
Trailing EV/EBITDA 0.25
Current Dividend Yield 0.00%
Dividend Growth Rate (5Y) 0.00%
Debt-to-Equity Ratio 0.17

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% $0.00
Discounted Cash Flow (5Y) 45% $0.00
Weighted Average 100% $0.00

Investment Conclusion

Based on our comprehensive valuation analysis, VirtualArmour International Inc's weighted average intrinsic value is $0.00, which is approximately 82.5% below the current market price of $0.01.

Key investment considerations:

  • Strong projected earnings growth (-13% to -6% margin)
  • Conservative capital structure (Debt/Equity of 0.17)

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