What is WILD.TO's Intrinsic value?

WildBrain Ltd (WILD.TO) Intrinsic Value Analysis

Executive Summary

As of May 24, 2025, WildBrain Ltd's estimated intrinsic value ranges from $4.34 to $4.34 per share, depending on the valuation methodology applied.

Valuation Method Fair Value (USD) Implied Upside/Downside
Earnings Power Value $4.34 +114.8%

Is WildBrain Ltd (WILD.TO) undervalued or overvalued?

With the current market price at $2.02, the stock appears to be significantly undervalued.

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 WildBrain Ltd'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 3.2% 3.7%
Equity market risk premium 5.1% 6.1%
Adjusted beta 0.33 0.57
Cost of equity 5.3% 8.1%
Cost of debt 5.4% 23.2%
Tax rate 11.4% 16.0%
Debt/Equity ratio 1.41 1.41
After-tax WACC 5.0% 14.7%

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 $107M
Discount Rate (WACC) 14.7% - 5.0%
Enterprise Value $727M - $2,150M
Net Debt $518M
Equity Value $210M - $1,632M
Outstanding Shares 212M
Fair Value $1 - $8
Selected Fair Value $4.34

Key Financial Metrics

Metric Value
Market Capitalization $429M
Enterprise Value $930M
Trailing P/E 0.00
Forward P/E 0.00
Trailing EV/EBITDA 5.65
Current Dividend Yield 7.02%
Dividend Growth Rate (5Y) 0.00%
Debt-to-Equity Ratio 1.41

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% $0.43
Weighted Average 100% $4.34

Investment Conclusion

Based on our comprehensive valuation analysis, WildBrain Ltd's weighted average intrinsic value is $4.34, which is approximately 114.8% above the current market price of $2.02.

Key investment considerations:

  • Strong projected earnings growth (-17% to -5% margin)
  • Consistent cash flow generation

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