As of June 10, 2025, Fonar Corp has a Discounted Cash Flow (DCF) derived fair value of $31.65 per share. With the current market price at $14.48, this represents a potential upside of 118.5%.
| Key Metrics | Value |
|---|---|
| DCF Fair Value (5-year) | $27.12 |
| DCF Fair Value (10-year) | $31.65 |
| Potential Upside (5-year) | 87.3% |
| Potential Upside (10-year) | 118.5% |
| Discount Rate (WACC) | 6.7% - 10.5% |
Revenue is projected to grow from $103 million in 06-2024 to $149 million by 06-2034, representing a compound annual growth rate of approximately 3.8%.
| Fiscal Year | Revenue (USD millions) | Growth |
|---|---|---|
| 06-2024 | 103 | 4% |
| 06-2025 | 103 | 0% |
| 06-2026 | 110 | 7% |
| 06-2027 | 113 | 3% |
| 06-2028 | 120 | 7% |
| 06-2029 | 126 | 5% |
| 06-2030 | 129 | 2% |
| 06-2031 | 132 | 2% |
| 06-2032 | 137 | 4% |
| 06-2033 | 144 | 6% |
| 06-2034 | 149 | 3% |
Net profit margin is expected to improve from 14% in 06-2024 to 14% by 06-2034, driven by operational efficiency and economies of scale.
| Fiscal Year | Net Profit (USD millions) | Profit Margin |
|---|---|---|
| 06-2024 | 14 | 14% |
| 06-2025 | 15 | 14% |
| 06-2026 | 16 | 14% |
| 06-2027 | 16 | 14% |
| 06-2028 | 17 | 14% |
| 06-2029 | 18 | 14% |
| 06-2030 | 19 | 14% |
| 06-2031 | 19 | 14% |
| 06-2032 | 20 | 14% |
| 06-2033 | 21 | 14% |
| 06-2034 | 22 | 14% |
with a 5-year average of $4 million. Projected CapEx is expected to maintain at approximately 5% of revenue.
Depreciation is based on an average useful life of 5 years for capital assets.
| Fiscal Year | D&A (USD millions) |
|---|---|
| 06-2025 | 4 |
| 06-2026 | 4 |
| 06-2027 | 4 |
| 06-2028 | 4 |
| 06-2029 | 5 |
| 06-2030 | 5 |
Net working capital is expected to increase gradually, with projected changes affecting free cash flow.
| Components | Average Days |
|---|---|
| Days Receivables | 264 |
| Days Inventory | 17 |
| Days Payables | 11 |
| Fiscal Year | EBITDA | Tax | CapEx | Change in NWC | FCF |
|---|---|---|---|---|---|
| 3M/2025 | 5 | 1 | 1 | (1) | 4 |
| 2026 | 22 | 5 | 5 | 7 | 6 |
| 2027 | 23 | 5 | 5 | 3 | 10 |
| 2028 | 24 | 5 | 6 | 5 | 9 |
| 2029 | 26 | 5 | 6 | 5 | 10 |
| Valuation Method | Fair Price (USD) | Potential Upside |
|---|---|---|
| 5-Year DCF (Growth) | 27.12 | 87.3% |
| 10-Year DCF (Growth) | 31.65 | 118.5% |
| 5-Year DCF (EBITDA) | 58.42 | 303.4% |
| 10-Year DCF (EBITDA) | 56.04 | 287.1% |
Is Fonar Corp (FONR) a buy or a sell? Fonar Corp is definitely a buy. Based on our DCF analysis, Fonar Corp (FONR) appears to be significantly undervalued with upside potential of 118.5%. The company's strong projected growth in revenue and profitability, coupled with consistent capital expenditure, supports our positive outlook on its intrinsic value.
Key investment drivers include:
Investors should consider a strong buy at the current market price of $14.48.