Based on my DCF valuation, the bear case scenario would be 13 cents, while a more optimistic scenario would be 23 cents.
The key assumptions I used for the bear case is -20% reduction in revenue next year and 3% growth in perpetually. In the optimistic scenario, I assumed -10% reduction in revenue next year and 3.25% growth in perpetually. Both cases assumed Weight Average cost of Capital(WACC) of between 8.01% ~ 9.69%.
Currently, the stock is trading at 7.4 cents- approximately 90% upside if you can buy it at current price.
Another conservative approach is dividend model, the expected dividend yield would be 27.5% next year if you bought the stock at 8 cents average price.
AEZ Price at posting:
7.3¢ Sentiment: None Disclosure: Not Held
