Estimating The Intrinsic Value Of Winking Studios Limited (Catalist:WKS)

Simply Wall St

Sat, February 14, 2026 at 8:55 AM GMT+9 6 min read

In this article:

WKS.SI

+4.35%

Key Insights

Using the 2 Stage Free Cash Flow to Equity, Winking Studios fair value estimate is S$0.21

Winking Studios' S$0.24 share price indicates it is trading at similar levels as its fair value estimate

 Analyst price target for WKS is US$0.34, which is 59% above our fair value estimate

Today we will run through one way of estimating the intrinsic value of Winking Studios Limited (Catalist:WKS) by estimating the company’s future cash flows and discounting them to their present value. Our analysis will employ the Discounted Cash Flow (DCF) model. Models like these may appear beyond the comprehension of a lay person, but they’re fairly easy to follow.

Companies can be valued in a lot of ways, so we would point out that a DCF is not perfect for every situation. Anyone interested in learning a bit more about intrinsic value should have a read of the Simply Wall St analysis model.

Trump has pledged to “unleash” American oil and gas and these 15 US stocks have developments that are poised to benefit.

What’s The Estimated Valuation?

We’re using the 2-stage growth model, which simply means we take in account two stages of company’s growth. In the initial period the company may have a higher growth rate and the second stage is usually assumed to have a stable growth rate. To start off with, we need to estimate the next ten years of cash flows. Where possible we use analyst estimates, but when these aren’t available we extrapolate the previous free cash flow (FCF) from the last estimate or reported value. We assume companies with shrinking free cash flow will slow their rate of shrinkage, and that companies with growing free cash flow will see their growth rate slow, over this period. We do this to reflect that growth tends to slow more in the early years than it does in later years.

A DCF is all about the idea that a dollar in the future is less valuable than a dollar today, and so the sum of these future cash flows is then discounted to today’s value:

10-year free cash flow (FCF) estimate

(“Est” = FCF growth rate estimated by Simply Wall St)
Present Value of 10-year Cash Flow (PVCF) = US$28m

Story Continues  

We now need to calculate the Terminal Value, which accounts for all the future cash flows after this ten year period. The Gordon Growth formula is used to calculate Terminal Value at a future annual growth rate equal to the 5-year average of the 10-year government bond yield of 2.5%. We discount the terminal cash flows to today’s value at a cost of equity of 7.7%.

Terminal Value (TV)$1 FCF2035 × (1 + g) ÷ (r – g) = US$4.9m× (1 + 2.5%) ÷ (7.7%– 2.5%) = US$97m

Present Value of Terminal Value (PVTV)$1 TV / (1 + r)10$1 US$97m÷ ( 1 + 7.7%)10$1 US$46m

The total value is the sum of cash flows for the next ten years plus the discounted terminal value, which results in the Total Equity Value, which in this case is US$74m. To get the intrinsic value per share, we divide this by the total number of shares outstanding. Relative to the current share price of S$0.2, the company appears around fair value at the time of writing. The assumptions in any calculation have a big impact on the valuation, so it is better to view this as a rough estimate, not precise down to the last cent.

Catalist:WKS Discounted Cash Flow February 13th 2026

Important Assumptions

We would point out that the most important inputs to a discounted cash flow are the discount rate and of course the actual cash flows. Part of investing is coming up with your own evaluation of a company’s future performance, so try the calculation yourself and check your own assumptions. The DCF also does not consider the possible cyclicality of an industry, or a company’s future capital requirements, so it does not give a full picture of a company’s potential performance. Given that we are looking at Winking Studios as potential shareholders, the cost of equity is used as the discount rate, rather than the cost of capital (or weighted average cost of capital, WACC) which accounts for debt. In this calculation we’ve used 7.7%, which is based on a levered beta of 1.218. Beta is a measure of a stock’s volatility, compared to the market as a whole. We get our beta from the industry average beta of globally comparable companies, with an imposed limit between 0.8 and 2.0, which is a reasonable range for a stable business.

Check out our latest analysis for Winking Studios

SWOT Analysis for Winking Studios

Strength

Currently debt free.

Weakness

Earnings declined over the past year.

Dividend is low compared to the top 25% of dividend payers in the Entertainment market.

Expensive based on P/S ratio and estimated fair value.

Opportunity

Annual earnings are forecast to grow faster than the Singaporean market.

Threat

Revenue is forecast to grow slower than 20% per year.

Looking Ahead:

Whilst important, the DCF calculation ideally won’t be the sole piece of analysis you scrutinize for a company. The DCF model is not a perfect stock valuation tool. Instead the best use for a DCF model is to test certain assumptions and theories to see if they would lead to the company being undervalued or overvalued. For instance, if the terminal value growth rate is adjusted slightly, it can dramatically alter the overall result. For Winking Studios, we’ve put together three relevant items you should explore:

**Risks**: Every company has them, and we've spotted  ** 3 warning signs for Winking Studios **  you should know about.

**Future Earnings**: How does WKS's growth rate compare to its peers and the wider market? Dig deeper into the analyst consensus number for the upcoming years by interacting with our free analyst growth expectation chart.

**Other High Quality Alternatives**: Do you like a good all-rounder? Explore our interactive list of high quality stocks to get an idea of what else is out there you may be missing!

PS. The Simply Wall St app conducts a discounted cash flow valuation for every stock on the CATALIST every day. If you want to find the calculation for other stocks just search here.

Have feedback on this article? Concerned about the content? Get in touch** with us directly.**_ Alternatively, email editorial-team (at) simplywallst.com._

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

Terms and Privacy Policy

Privacy Dashboard

More Info