What is WNRP's Intrinsic value?

West Suburban Bancorp Inc (WNRP) Intrinsic Value Analysis

Executive Summary

As of June 1, 2025, West Suburban Bancorp Inc's estimated intrinsic value ranges from $201.79 to $465.26 per share, depending on the valuation methodology applied.

Valuation Method Fair Value (USD) Implied Upside/Downside
Dividend Discount Model (Multi-Stage) $465.26 -41.9%
Dividend Discount Model (Stable) $201.79 -74.8%

Is West Suburban Bancorp Inc (WNRP) undervalued or overvalued?

With the current market price at $801.00, 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 West Suburban Bancorp Inc's intrinsic value, including:

  1. Dividend Discount Model (DDM): Values the company based on expected future dividend payments

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 4.2% 5.2%
Adjusted beta 0.95 1.11
Cost of equity 7.2% 10.0%
Cost of debt 5.0% 5.0%
Tax rate 35.8% 48.1%
Debt/Equity ratio 1 1
After-tax WACC 5.2% 6.3%

Valuation Methods

2. Dividend Discount Model (DDM)

The DDM values a company based on its expected future dividend payments. We used two approaches:

Multi-Stage DDM:

  • Current payout ratio: 0.0%
  • Stable payout ratio: 90.0%
  • Growth transition: 5 years
  • Cost of equity: 8.6%
  • Long-term growth rate: 3.5%
  • Fair value: $465.26 (-41.9% from current price)

Stable DDM:

  • Stable payout ratio: 70% (Low) to 90% (High)
  • Cost of equity: 10.0% (Low) to 7.2% (High)
  • Long-term growth rate: 2.5% (Low) to 4.5% (High)
  • Fair value range: $89 to $315
  • Selected fair value: $201.79 (-74.8% from current price)

Key Financial Metrics

Metric Value
Market Capitalization $344M
Enterprise Value $248M
Trailing P/E 84.50
Forward P/E 23.19
Trailing EV/EBITDA 0.00
Current Dividend Yield 0.00%
Dividend Growth Rate (5Y) -100.00%
Debt-to-Equity Ratio 1.08

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
Dividend Discount Model (Multi-Stage) 57% $93.05
Dividend Discount Model (Stable) 43% $30.27
Weighted Average 100% $352.35

Investment Conclusion

Based on our comprehensive valuation analysis, West Suburban Bancorp Inc's weighted average intrinsic value is $352.35, which is approximately 56.0% below the current market price of $801.00.

Key investment considerations:

  • Overall financial health and market position

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