What is ZIL2.DE's Intrinsic value?

Elringklinger AG (ZIL2.DE) Intrinsic Value Analysis

Executive Summary

As of December 15, 2025, Elringklinger AG's estimated intrinsic value ranges from $27.19 to $27.19 per share, depending on the valuation methodology applied.

Valuation Method Fair Value (USD) Implied Upside/Downside
Earnings Power Value $27.19 +557.5%

Is Elringklinger AG (ZIL2.DE) undervalued or overvalued?

With the current market price at $4.13, 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 Elringklinger AG'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 2.8% 3.3%
Equity market risk premium 5.1% 6.1%
Adjusted beta 1.14 1.37
Cost of equity 8.6% 12.2%
Cost of debt 4.0% 7.0%
Tax rate 30.0% 30.0%
Debt/Equity ratio 1.39 1.39
After-tax WACC 5.2% 7.9%

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 $133M
Discount Rate (WACC) 7.9% - 5.2%
Enterprise Value $1,680M - $2,552M
Net Debt $393M
Equity Value $1,287M - $2,158M
Outstanding Shares 63M
Fair Value $20 - $34
Selected Fair Value $27.19

Key Financial Metrics

Metric Value
Market Capitalization $262M
Enterprise Value $655M
Trailing P/E 0.00
Forward P/E 0.00
Trailing EV/EBITDA 4.30
Current Dividend Yield 701.67%
Dividend Growth Rate (5Y) -23.34%
Debt-to-Equity Ratio 1.39

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% $2.72
Weighted Average 100% $27.19

Investment Conclusion

Based on our comprehensive valuation analysis, Elringklinger AG's intrinsic value is $27.19, which is approximately 557.5% above the current market price of $4.13.

Key investment considerations:

  • Strong projected earnings growth (-9% to -1% margin)
  • Consistent cash flow generation

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