As of June 18, 2025, ALJ Regional Holdings Inc's estimated intrinsic value ranges from $1.33 to $38.69 per share, depending on the valuation methodology applied.
| Valuation Method | Fair Value (USD) | Implied Upside/Downside |
|---|---|---|
| Discounted Cash Flow (10Y) | $1.91 | +17.7% |
| Discounted Cash Flow (5Y) | $1.33 | -17.8% |
| Dividend Discount Model (Stable) | $38.69 | +2288.5% |
| Earnings Power Value | $5.18 | +219.5% |
Is ALJ Regional Holdings Inc (ALJJ) undervalued or overvalued?
With the current market price at $1.62, the stock appears to be significantly undervalued.
Intrinsic value represents the "true" worth of a company based on its fundamentals rather than market sentiment. We've employed multiple methodologies to triangulate ALJ Regional Holdings Inc's intrinsic value, including:
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 | 3.9% | 4.4% |
| Equity market risk premium | 4.6% | 5.6% |
| Adjusted beta | 0.74 | 1.02 |
| Cost of equity | 7.3% | 10.6% |
| Cost of debt | 7.0% | 9.3% |
| Tax rate | 26.2% | 27.0% |
| Debt/Equity ratio | 1.64 | 1.64 |
| After-tax WACC | 6.0% | 8.2% |
Our DCF model projects cash flows over 5-year and 10-year horizons, with the following key assumptions:
| DCF Model | Fair Value | Enterprise Value | % from Terminal Value |
|---|---|---|---|
| 5-Year Growth | $1 | $30M | 61.4% |
| 10-Year Growth | $2 | $52M | 57.7% |
| 5-Year EBITDA | $4 | $137M | 91.5% |
| 10-Year EBITDA | $4 | $150M | 85.3% |
The DDM values a company based on its expected future dividend payments. We used two approaches:
EPV assesses a company's value based on its current normalized earnings power, assuming no growth.
| EPV Component | Value |
|---|---|
| Normalized Earnings | $12M |
| Discount Rate (WACC) | 8.2% - 6.0% |
| Enterprise Value | $150M - $207M |
| Net Debt | $(21)M |
| Equity Value | $171M - $229M |
| Outstanding Shares | 39M |
| Fair Value | $4 - $6 |
| Selected Fair Value | $5.18 |
| Metric | Value |
|---|---|
| Market Capitalization | $63M |
| Enterprise Value | $41M |
| Trailing P/E | 0.44 |
| Forward P/E | 0.44 |
| Trailing EV/EBITDA | 9.70 |
| Current Dividend Yield | 37.72% |
| Dividend Growth Rate (5Y) | 0.00% |
| Debt-to-Equity Ratio | 1.64 |
To determine the most reliable intrinsic value estimate, we weigh each valuation method based on:
| Valuation Method | Weight | Weighted Value |
|---|---|---|
| Discounted Cash Flow (10Y) | 37% | $0.57 |
| Discounted Cash Flow (5Y) | 31% | $0.33 |
| Dividend Discount Model (Stable) | 19% | $5.80 |
| Earnings Power Value | 12% | $0.52 |
| Weighted Average | 100% | $9.03 |
Based on our comprehensive valuation analysis, ALJ Regional Holdings Inc's weighted average intrinsic value is $9.03, which is approximately 457.6% above the current market price of $1.62.
Key investment considerations:
Given these factors, we believe ALJ Regional Holdings Inc is currently significantly undervalued with the potential for long-term appreciation based on the company's growth trajectory and financial strength.