As of June 17, 2025, Hennessy Advisors Inc has a Discounted Cash Flow (DCF) derived fair value of $34.61 per share. With the current market price at $11.05, this represents a potential upside of 213.2%.
| Key Metrics | Value |
|---|---|
| DCF Fair Value (5-year) | $35.52 |
| DCF Fair Value (10-year) | $34.61 |
| Potential Upside (5-year) | 221.4% |
| Potential Upside (10-year) | 213.2% |
| Discount Rate (WACC) | 5.7% - 7.5% |
Revenue is projected to grow from $30 million in 09-2024 to $39 million by 09-2034, representing a compound annual growth rate of approximately 2.7%.
| Fiscal Year | Revenue (USD millions) | Growth |
|---|---|---|
| 09-2024 | 30 | 23% |
| 09-2025 | 31 | 4% |
| 09-2026 | 32 | 4% |
| 09-2027 | 33 | 2% |
| 09-2028 | 33 | 2% |
| 09-2029 | 35 | 4% |
| 09-2030 | 35 | 2% |
| 09-2031 | 36 | 2% |
| 09-2032 | 37 | 3% |
| 09-2033 | 38 | 2% |
| 09-2034 | 39 | 4% |
Net profit margin is expected to improve from 24% in 09-2024 to 26% by 09-2034, driven by operational efficiency and economies of scale.
| Fiscal Year | Net Profit (USD millions) | Profit Margin |
|---|---|---|
| 09-2024 | 7 | 24% |
| 09-2025 | 7 | 24% |
| 09-2026 | 8 | 25% |
| 09-2027 | 8 | 25% |
| 09-2028 | 9 | 26% |
| 09-2029 | 9 | 26% |
| 09-2030 | 9 | 26% |
| 09-2031 | 9 | 26% |
| 09-2032 | 10 | 26% |
| 09-2033 | 10 | 26% |
| 09-2034 | 10 | 26% |
with a 5-year average of $1 million. Projected CapEx is expected to maintain at approximately 2% of revenue.
Depreciation is based on an average useful life of 5 years for capital assets.
| Fiscal Year | D&A (USD millions) |
|---|---|
| 09-2025 | 1 |
| 09-2026 | 1 |
| 09-2027 | 1 |
| 09-2028 | 1 |
| 09-2029 | 1 |
| 09-2030 | 1 |
Net working capital is expected to increase gradually, with projected changes affecting free cash flow.
| Components | Average Days |
|---|---|
| Days Receivables | 31 |
| Days Inventory | 0 |
| Days Payables | 0 |
| Fiscal Year | EBITDA | Tax | CapEx | Change in NWC | FCF |
|---|---|---|---|---|---|
| 6M/2025 | 5 | 1 | 0 | (0) | 3 |
| 2026 | 11 | 3 | 1 | 0 | 7 |
| 2027 | 11 | 3 | 1 | 0 | 7 |
| 2028 | 12 | 3 | 1 | (0) | 8 |
| 2029 | 12 | 3 | 1 | 0 | 8 |
| Valuation Method | Fair Price (USD) | Potential Upside |
|---|---|---|
| 5-Year DCF (Growth) | 35.52 | 221.4% |
| 10-Year DCF (Growth) | 34.61 | 213.2% |
| 5-Year DCF (EBITDA) | 15.21 | 37.7% |
| 10-Year DCF (EBITDA) | 17.51 | 58.5% |
Is Hennessy Advisors Inc (HNNA) a buy or a sell? Hennessy Advisors Inc is definitely a buy. Based on our DCF analysis, Hennessy Advisors Inc (HNNA) appears to be significantly undervalued with upside potential of 213.2%. 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 $11.05.