What is FORD's Intrinsic value?

Forward Industries Inc (FORD) Intrinsic Value Analysis

Executive Summary

As of June 14, 2025, Forward Industries Inc's estimated intrinsic value ranges from $2.28 to $2.28 per share, depending on the valuation methodology applied.

Valuation Method Fair Value (USD) Implied Upside/Downside
Discounted Cash Flow (10Y) $2.28 -64.1%

Is Forward Industries Inc (FORD) undervalued or overvalued?

With the current market price at $6.37, the stock appears to be significantly overvalued.

Understanding Intrinsic Value

Intrinsic value represents the "true" worth of a company based on its fundamentals rather than market sentiment. We've employed multiple methodologies to triangulate Forward Industries Inc's intrinsic value, including:

  1. Discounted Cash Flow (DCF): Values the company based on projected future cash flows

Weighted Average Cost of Capital (WACC)

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 0.39 0.88
Cost of equity 5.7% 9.8%
Cost of debt 6.1% 7.0%
Tax rate 0.3% 0.8%
Debt/Equity ratio 0.08 0.08
After-tax WACC 5.7% 9.6%

Valuation Methods

1. Discounted Cash Flow (DCF) Valuation

Our DCF model projects cash flows over 5-year and 10-year horizons, with the following key assumptions:

  • Forecast Period: 10-year DCF
  • Terminal Growth Rate: 0.0% (range: 3.0% - 5.0%)
  • Discount Rate: 7.6% (range: 0.0% - 9.3%)

Key Projections:

  • Revenue growth from $30 (FY09-2024) to $26 (FY09-2034)
  • Net profit margin expansion from -6% to 1%
  • Capital expenditures maintained at approximately 0% of revenue
DCF Model Fair Value Enterprise Value % from Terminal Value
5-Year Growth $(1,234) $(3)M 82.3%
10-Year Growth $2 $1M 105.1%
5-Year EBITDA $1 $(0)M 9.0%
10-Year EBITDA $2 $1M 106.0%

Key Financial Metrics

Metric Value
Market Capitalization $7M
Enterprise Value $6M
Trailing P/E 0.00
Forward P/E 0.00
Trailing EV/EBITDA 6.85
Current Dividend Yield 0.00%
Dividend Growth Rate (5Y) 0.00%
Debt-to-Equity Ratio 0.08

Investment Decision Framework

To determine the most reliable intrinsic value estimate, we weigh each valuation method based on:

  1. Forecast Certainty: DCF methods rely on long-term projections, while earnings power value focuses on current normalized earnings
  2. Business Model Alignment: Dividend models are more appropriate for mature companies with established dividend policies
  3. Historical Accuracy: How well each method has predicted fair value historically

Valuation Weight Matrix

Valuation Method Weight Weighted Value
Discounted Cash Flow (10Y) 100% $0.69
Weighted Average 100% $2.28

Investment Conclusion

Based on our comprehensive valuation analysis, Forward Industries Inc's weighted average intrinsic value is $2.28, which is approximately 64.1% below the current market price of $6.37.

Key investment considerations:

  • Strong projected earnings growth (-6% to 1% margin)
  • Conservative capital structure (Debt/Equity of 0.08)

Given these factors, we believe Forward Industries Inc is currently significantly overvalued with the potential for long-term appreciation based on the company's growth trajectory and financial strength.