As of June 21, 2025, Escalon Medical Corp's estimated intrinsic value ranges from $0.03 to $1.94 per share, depending on the valuation methodology applied.
| Valuation Method | Fair Value (USD) | Implied Upside/Downside |
|---|---|---|
| Discounted Cash Flow (10Y) | $1.94 | +411.7% |
| Discounted Cash Flow (5Y) | $1.37 | +261.4% |
| Dividend Discount Model (Multi-Stage) | $1.21 | +218.9% |
| Dividend Discount Model (Stable) | $0.90 | +136.6% |
| Earnings Power Value | $0.03 | -91.3% |
Is Escalon Medical Corp (ESMC) undervalued or overvalued?
With the current market price at $0.38, 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 Escalon Medical Corp'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 | 0.33 | 0.37 |
| Cost of equity | 5.4% | 7.0% |
| Cost of debt | 4.0% | 4.6% |
| Tax rate | 26.2% | 27.0% |
| Debt/Equity ratio | 0.14 | 0.14 |
| After-tax WACC | 5.1% | 6.5% |
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 | $7M | 88.5% |
| 10-Year Growth | $1 | $10M | 76.9% |
| 5-Year EBITDA | $1 | $4M | 78.4% |
| 10-Year EBITDA | $1 | $6M | 59.5% |
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 | $(0)M |
| Discount Rate (WACC) | 6.5% - 5.1% |
| Enterprise Value | $(0)M - $(0)M |
| Net Debt | $(0)M |
| Equity Value | $0M - $0M |
| Outstanding Shares | 7M |
| Fair Value | $0 - $0 |
| Selected Fair Value | $0.03 |
| Metric | Value |
|---|---|
| Market Capitalization | $2M |
| Enterprise Value | $2M |
| Trailing P/E | 10.47 |
| Forward P/E | 225.68 |
| Trailing EV/EBITDA | 6.90 |
| Current Dividend Yield | 0.00% |
| Dividend Growth Rate (5Y) | 0.00% |
| Debt-to-Equity Ratio | 0.14 |
To determine the most reliable intrinsic value estimate, we weigh each valuation method based on:
| Valuation Method | Weight | Weighted Value |
|---|---|---|
| Discounted Cash Flow (10Y) | 30% | $0.58 |
| Discounted Cash Flow (5Y) | 25% | $0.34 |
| Dividend Discount Model (Multi-Stage) | 20% | $0.24 |
| Dividend Discount Model (Stable) | 15% | $0.13 |
| Earnings Power Value | 10% | $0.00 |
| Weighted Average | 100% | $1.31 |
Based on our comprehensive valuation analysis, Escalon Medical Corp's weighted average intrinsic value is $1.31, which is approximately 244.0% above the current market price of $0.38.
Key investment considerations:
Given these factors, we believe Escalon Medical Corp is currently significantly undervalued with the potential for long-term appreciation based on the company's growth trajectory and financial strength.