Intrinsic Value IDI (IDIP.PA)

• Previous Close: €73.60
• Intrinsic Value: €72.59
• Upside potential: -1%

Stock Valuation Context

Business Model And Market Position

IDI is a Paris-based private equity firm with a diversified investment strategy focused on leveraged buyouts, expansion capital, and secondary private equity portfolios. The firm targets small and medium-sized enterprises (SMEs) in France and broader European developed markets, investing between €5 million and €25 million per deal, with flexibility for larger transactions. Its core revenue model derives from capital appreciation and management fees, leveraging its expertise in majority and minority stakes across various sectors. IDI differentiates itself through a hybrid approach, combining direct investments with fund-of-funds strategies, including hedge funds and pre-IPO financing. With a 50-year track record, the firm maintains a strong regional presence, specializing in companies with enterprise values of €10 million to €300 million. Its market position is reinforced by a disciplined investment framework and a focus on mature, cash-generative businesses, positioning it as a nimble player in Europe's mid-market private equity landscape.

Revenue Profitability And Efficiency

IDI reported €17.1 million in revenue for the period, with net income reaching €19.6 million, reflecting strong profitability despite a negative operating cash flow of €17.3 million. The firm's capital expenditures were minimal at €0.1 million, indicating a capital-light operational model. Diluted EPS stood at €2.75, demonstrating efficient earnings distribution across its 7.1 million outstanding shares.

Earnings Power And Capital Efficiency

The firm's earnings power is evident in its net income exceeding revenue, suggesting effective cost management and investment performance. With €112 million in cash and equivalents against €58.1 million in total debt, IDI maintains a conservative leverage profile. The negative operating cash flow may reflect timing differences in investment realizations rather than structural inefficiencies.

Balance Sheet And Financial Health

IDI's balance sheet remains robust, with cash reserves covering nearly twice its total debt. The €530.7 million market capitalization implies investor confidence in its asset base. The low beta of 0.519 indicates relative stability compared to broader markets, consistent with its private equity focus on mature companies.

Growth Trends And Dividend Policy

The firm demonstrates a shareholder-friendly approach with a €2.8 dividend per share, yielding approximately 5.2% based on current market capitalization. Growth appears driven by selective deal-making rather than aggressive expansion, aligning with its middle-market specialization. The dividend policy suggests a focus on returning capital while maintaining flexibility for new investments.

Valuation And Market Expectations

Trading at a P/E ratio near 27x based on trailing earnings, the market appears to price in IDI's long-term investment expertise and stable cash flows. The premium valuation reflects its niche positioning in European SME private equity and consistent dividend payouts, though dependent on successful portfolio management.

Strategic Advantages And Outlook

IDI's half-century of operation provides deep market knowledge and deal-sourcing networks in France's private equity ecosystem. Its hybrid investment model offers diversification benefits. Near-term performance will hinge on exit opportunities in its portfolio and the broader European M&A environment, with its cash position providing dry powder for counter-cyclical opportunities.

Sources

Company description, financial data from ticker profile