What is WSBN.L's Intrinsic value?

Wishbone Gold PLC (WSBN.L) Intrinsic Value Analysis

Executive Summary

As of May 22, 2025, Wishbone Gold PLC's estimated intrinsic value ranges from $15.32 to $15.32 per share, depending on the valuation methodology applied.

Valuation Method Fair Value (USD) Implied Upside/Downside
Earnings Power Value $15.32 +9781.6%

Is Wishbone Gold PLC (WSBN.L) undervalued or overvalued?

With the current market price at $0.15, 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 Wishbone Gold PLC'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 4.0% 4.5%
Equity market risk premium 6.0% 7.0%
Adjusted beta 0.5 0.82
Cost of equity 7.0% 10.7%
Cost of debt 5.0% 5.0%
Tax rate 19.0% 19.0%
Debt/Equity ratio 1 1
After-tax WACC 5.5% 7.4%

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 $1M
Discount Rate (WACC) 5.9% - 4.5%
Enterprise Value $24M - $31M
Net Debt $(5)M
Equity Value $29M - $36M
Outstanding Shares 2M
Fair Value $16 - $20
Selected Fair Value $15.32

Key Financial Metrics

Metric Value
Market Capitalization $2M
Enterprise Value $2M
Trailing P/E 0.00
Forward P/E 0.00
Trailing EV/EBITDA 1.20
Current Dividend Yield 62.96%
Dividend Growth Rate (5Y) 0.00%
Debt-to-Equity Ratio 0.97

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% $1.53
Weighted Average 100% $15.32

Investment Conclusion

Based on our comprehensive valuation analysis, Wishbone Gold PLC's weighted average intrinsic value is $15.32, which is approximately 9781.6% above the current market price of $0.15.

Key investment considerations:

  • Strong projected earnings growth (-1367% to -116% margin)
  • Consistent cash flow generation

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