What is ZIN.L's Intrinsic value?

Zinc Media Group PLC (ZIN.L) Intrinsic Value Analysis

Executive Summary

As of June 20, 2025, Zinc Media Group PLC's estimated intrinsic value ranges from $5.75 to $521.37 per share, depending on the valuation methodology applied.

Valuation Method Fair Value (USD) Implied Upside/Downside
Dividend Discount Model (Multi-Stage) $5.75 -91.8%
Earnings Power Value $521.37 +644.8%

Is Zinc Media Group PLC (ZIN.L) undervalued or overvalued?

With the current market price at $70.00, 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 Zinc Media Group PLC'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 4.0% 4.5%
Equity market risk premium 6.0% 7.0%
Adjusted beta 0.45 0.62
Cost of equity 6.7% 9.3%
Cost of debt 7.2% 24.0%
Tax rate 3.6% 14.4%
Debt/Equity ratio 0.29 0.29
After-tax WACC 6.7% 11.9%

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: 8.0%
  • Long-term growth rate: 2.0%
  • Fair value: $5.75 (-91.8% from current price)

Stable DDM:

  • Stable payout ratio: 70% (Low) to 90% (High)
  • Cost of equity: 9.3% (Low) to 6.7% (High)
  • Long-term growth rate: 1.0% (Low) to 3.0% (High)
  • Fair value range: $(141) to $(411)
  • Selected fair value: $-276.23 (-494.6% 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 $9M
Discount Rate (WACC) 11.9% - 6.7%
Enterprise Value $78M - $137M
Net Debt $(2)M
Equity Value $80M - $139M
Outstanding Shares 0M
Fair Value $380 - $662
Selected Fair Value $521.37

Key Financial Metrics

Metric Value
Market Capitalization $15M
Enterprise Value $13M
Trailing P/E 0.00
Forward P/E 0.00
Trailing EV/EBITDA 2.45
Current Dividend Yield 0.00%
Dividend Growth Rate (5Y) 0.00%
Debt-to-Equity Ratio 0.29

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) 67% $1.15
Earnings Power Value 33% $52.14
Weighted Average 100% $177.62

Investment Conclusion

Based on our comprehensive valuation analysis, Zinc Media Group PLC's weighted average intrinsic value is $177.62, which is approximately 153.7% above the current market price of $70.00.

Key investment considerations:

  • Strong projected earnings growth (-2% to 1% margin)
  • Conservative capital structure (Debt/Equity of 0.29)

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