What is WOW.V's Intrinsic value?

Wow Unlimited Media Inc (WOW.V) Intrinsic Value Analysis

Executive Summary

As of June 1, 2025, Wow Unlimited Media Inc's estimated intrinsic value ranges from $4.04 to $13.22 per share, depending on the valuation methodology applied.

Valuation Method Fair Value (USD) Implied Upside/Downside
Dividend Discount Model (Stable) $4.04 +178.8%
Earnings Power Value $13.22 +811.9%

Is Wow Unlimited Media Inc (WOW.V) undervalued or overvalued?

With the current market price at $1.45, 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 Wow Unlimited Media Inc's intrinsic value, including:

  1. Dividend Discount Model (DDM): Values the company based on expected future dividend payments
  2. 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 4.7% 5.7%
Adjusted beta 0.7 1.17
Cost of equity 6.5% 10.9%
Cost of debt 4.7% 8.0%
Tax rate 1.9% 7.8%
Debt/Equity ratio 0.82 0.82
After-tax WACC 5.6% 9.3%

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: 8.7%
  • Long-term growth rate: 4.0%
  • Fair value: $-4.63 (-419.3% from current price)

Stable DDM:

  • Stable payout ratio: 70% (Low) to 90% (High)
  • Cost of equity: 10.9% (Low) to 6.5% (High)
  • Long-term growth rate: 3.0% (Low) to 5.0% (High)
  • Fair value range: $1 to $7
  • Selected fair value: $4.04 (178.8% from current price)

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 $32M
Discount Rate (WACC) 9.3% - 5.6%
Enterprise Value $348M - $575M
Net Debt $38M
Equity Value $310M - $537M
Outstanding Shares 32M
Fair Value $10 - $17
Selected Fair Value $13.22

Key Financial Metrics

Metric Value
Market Capitalization $46M
Enterprise Value $85M
Trailing P/E 12.46
Forward P/E 12.46
Trailing EV/EBITDA 2.70
Current Dividend Yield 0.00%
Dividend Growth Rate (5Y) 0.00%
Debt-to-Equity Ratio 0.82

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 (Stable) 60% $0.61
Earnings Power Value 40% $1.32
Weighted Average 100% $7.71

Investment Conclusion

Based on our comprehensive valuation analysis, Wow Unlimited Media Inc's weighted average intrinsic value is $7.71, which is approximately 432.0% above the current market price of $1.45.

Key investment considerations:

  • Strong projected earnings growth (-8% to -8% margin)
  • Consistent cash flow generation

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