Water Intelligence Valuation

Q: What is the Fair Price of WATR when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

WATR (£4.05) is trading below our estimate of [[fair value]] (£9.98)

Is WATR undervalued compared to its fair value, analyst forecasts and its price relative to the market?

Valuation Score

3/6

Valuation Score 3/6

Below Fair Value
Significantly Below Fair Value
Price-To-Earnings vs Peers
Price-To-Earnings vs Industry
Price-To-Earnings vs Fair Ratio
Analyst Forecast

Share Price vs Fair Value

What is the Fair Price of WATR when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

Below Fair Value: WATR (£4.05) is trading below our estimate of fair value (£9.98)

Significantly Below Fair Value: WATR is trading below fair value by more than 20%.

Key Valuation Metric

Which metric is best to use when looking at relative valuation for WATR?

Key metric: As WATR is profitable we use its Price-To-Earnings Ratio for relative valuation analysis.

The above table shows the Price to Earnings ratio for WATR. This is calculated by dividing WATR's market cap by their current earnings.
What is WATR's PE Ratio?
PE Ratio	18.2x
Earnings	US$4.85m
Market Cap	US$88.27m

WATR key valuation metrics and ratios. From Price to Earnings, Price to Sales and Price to Book to Price to Earnings Growth Ratio, Enterprise Value and EBITDA.
Key Statistics
Enterprise Value/Revenue	1.2x
Enterprise Value/EBITDA	9x
PEG Ratio	1.2x

Price to Earnings Ratio vs Peers

How does WATR's PE Ratio compare to its peers?

The above table shows the PE ratio for WATR vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
Company	Forward PE	Estimated Growth	Market Cap
Peer Average	31.6x
KINO Kinovo	7x	-1.3%	UK£35.7m
REAT REACT Group	89.4x	n/a	UK£19.9m
RWI Renewi	18.7x	36.5%	UK£472.9m
MTO Mitie Group	11.3x	11.3%	UK£1.4b
WATR Water Intelligence	18.2x	15.6%	UK£70.4m

Price-To-Earnings vs Peers: WATR is good value based on its Price-To-Earnings Ratio (18.2x) compared to the peer average (31.6x).

Price to Earnings Ratio vs Industry

How does WATR's PE Ratio compare vs other companies in the European Commercial Services Industry?

0 Companies	Price / Earnings	Estimated Growth	Market Cap

0 Companies		Estimated Growth	Market Cap

No more companies

Price-To-Earnings vs Industry: WATR is expensive based on its Price-To-Earnings Ratio (18.2x) compared to the European Commercial Services industry average (14.6x).

Price to Earnings Ratio vs Fair Ratio

What is WATR's PE Ratio compared to its Fair PE Ratio? This is the expected PE Ratio taking into account the company's forecast earnings growth, profit margins and other risk factors.

WATR PE Ratio vs Fair Ratio.
Fair Ratio
Current PE Ratio	18.2x
Fair PE Ratio	15.8x

Price-To-Earnings vs Fair Ratio: WATR is expensive based on its Price-To-Earnings Ratio (18.2x) compared to the estimated Fair Price-To-Earnings Ratio (15.8x).

Analyst Price Targets

What is the analyst 12-month forecast and do we have any statistical confidence in the consensus price target?

The above table shows the analyst WATR forecast and predictions for the stock price in 12 month’s time.
Date	Share Price	Average 1Y Price Target	Dispersion	High	Low	1Y Actual price	Analysts
Current	UK£4.05	UK£8.25 +103.7%	3.0%	UK£8.50	UK£8.00	n/a	2
Sep ’24	UK£4.15	UK£9.00 +116.9%	11.1%	UK£10.00	UK£8.00	UK£4.00	2
Aug ’24	UK£4.45	UK£9.00 +102.2%	11.1%	UK£10.00	UK£8.00	UK£4.15	2
Jul ’24	UK£4.20	UK£9.00 +114.3%	11.1%	UK£10.00	UK£8.00	UK£4.15	2
Jun ’24	UK£4.23	UK£13.17 +211.6%	7.8%	UK£14.50	UK£12.00	UK£3.83	3
May ’24	UK£4.33	UK£13.17 +204.4%	7.8%	UK£14.50	UK£12.00	UK£3.40	3
Apr ’24	UK£4.45	UK£13.17 +195.9%	7.8%	UK£14.50	UK£12.00	UK£3.18	3
Mar ’24	UK£5.05	UK£12.38 +145.0%	13.2%	UK£14.50	UK£10.00	UK£3.63	4
Feb ’24	UK£5.80	UK£12.94 +123.1%	13.8%	UK£14.50	UK£10.00	UK£3.90	4
Jan ’24	UK£6.60	UK£12.94 +96.0%	13.8%	UK£14.50	UK£10.00	UK£4.05	4
Dec ’23	UK£6.50	UK£12.94 +99.0%	13.8%	UK£14.50	UK£10.00	UK£4.13	4
Nov ’23	UK£6.35	UK£13.03 +105.1%	16.7%	UK£15.60	UK£10.00	UK£3.34	4

Analyst Forecast: Target price is more than 20% higher than the current share price, but there are not enough analysts covering the stock to determine statistical confidence in agreement.