What is VVNT's Intrinsic value?

Vivint Smart Home Inc (VVNT) Intrinsic Value Analysis

Executive Summary

As of June 10, 2025, Vivint Smart Home Inc's estimated intrinsic value ranges from $9.88 to $9.88 per share, depending on the valuation methodology applied.

Valuation Method Fair Value (USD) Implied Upside/Downside
Earnings Power Value $9.88 -17.7%

Is Vivint Smart Home Inc (VVNT) undervalued or overvalued?

With the current market price at $12.00, the stock appears to be moderately 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 Vivint Smart Home Inc'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 3.9% 4.4%
Equity market risk premium 4.6% 5.6%
Adjusted beta 0.69 0.82
Cost of equity 7.0% 9.5%
Cost of debt 23.9% 23.9%
Tax rate 0.5% 0.8%
Debt/Equity ratio 1.05 1.05
After-tax WACC 15.6% 16.8%

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 $732M
Discount Rate (WACC) 16.8% - 15.6%
Enterprise Value $4,371M - $4,691M
Net Debt $2,410M
Equity Value $1,960M - $2,281M
Outstanding Shares 215M
Fair Value $9 - $11
Selected Fair Value $9.88

Key Financial Metrics

Metric Value
Market Capitalization $2576M
Enterprise Value $4987M
Trailing P/E 0.00
Forward P/E 0.00
Trailing EV/EBITDA 11.20
Current Dividend Yield 0.00%
Dividend Growth Rate (5Y) 0.00%
Debt-to-Equity Ratio 1.05

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% $0.99
Weighted Average 100% $9.88

Investment Conclusion

Based on our comprehensive valuation analysis, Vivint Smart Home Inc's weighted average intrinsic value is $9.88, which is approximately 17.7% below the current market price of $12.00.

Key investment considerations:

  • Strong projected earnings growth (-21% to -20% margin)
  • Consistent cash flow generation

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