As of February 6, 2026, SCI Engineered Materials Inc has a Discounted Cash Flow (DCF) derived fair value of $4.88 per share. With the current market price at $5.84, this represents a potential upside of -16.4%.
| Key Metrics | Value |
|---|---|
| DCF Fair Value (5-year) | $4.25 |
| DCF Fair Value (10-year) | $4.88 |
| Potential Upside (5-year) | -27.4% |
| Potential Upside (10-year) | -16.4% |
| Discount Rate (WACC) | 7.3% - 9.4% |
Revenue is projected to grow from $23 million in 12-2024 to $23 million by 12-2034, representing a compound annual growth rate of approximately 0.0%.
| Fiscal Year | Revenue (USD millions) | Growth |
|---|---|---|
| 12-2024 | 23 | 18% |
| 12-2025 | 12 | -48% |
| 12-2026 | 13 | 9% |
| 12-2027 | 14 | 11% |
| 12-2028 | 16 | 10% |
| 12-2029 | 17 | 10% |
| 12-2030 | 19 | 6% |
| 12-2031 | 20 | 6% |
| 12-2032 | 21 | 5% |
| 12-2033 | 22 | 5% |
| 12-2034 | 23 | 5% |
Net profit margin is expected to improve from 8% in 12-2024 to 8% by 12-2034, driven by operational efficiency and economies of scale.
| Fiscal Year | Net Profit (USD millions) | Profit Margin |
|---|---|---|
| 12-2024 | 2 | 8% |
| 12-2025 | 1 | 8% |
| 12-2026 | 1 | 8% |
| 12-2027 | 1 | 8% |
| 12-2028 | 1 | 8% |
| 12-2029 | 1 | 8% |
| 12-2030 | 2 | 8% |
| 12-2031 | 2 | 8% |
| 12-2032 | 2 | 8% |
| 12-2033 | 2 | 8% |
| 12-2034 | 2 | 8% |
with a 5-year average of $0 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) |
|---|---|
| 12-2025 | 0 |
| 12-2026 | 0 |
| 12-2027 | 0 |
| 12-2028 | 0 |
| 12-2029 | 0 |
| 12-2030 | 0 |
Net working capital is expected to increase gradually, with projected changes affecting free cash flow.
| Components | Average Days |
|---|---|
| Days Receivables | 12 |
| Days Inventory | 49 |
| Days Payables | 8 |
| Fiscal Year | EBITDA | Tax | CapEx | Change in NWC | FCF |
|---|---|---|---|---|---|
| 6M/2025 | 1 | 0 | 0 | (0) | 1 |
| 2026 | 2 | 0 | 0 | 0 | 1 |
| 2027 | 2 | 0 | 0 | (0) | 1 |
| 2028 | 2 | 0 | 0 | 0 | 1 |
| 2029 | 2 | 0 | 0 | 0 | 1 |
| Valuation Method | Fair Price (USD) | Potential Upside |
|---|---|---|
| 5-Year DCF (Growth) | 4.25 | -27.4% |
| 10-Year DCF (Growth) | 4.88 | -16.4% |
| 5-Year DCF (EBITDA) | 7.44 | 27.3% |
| 10-Year DCF (EBITDA) | 7.68 | 31.5% |
Is SCI Engineered Materials Inc (SCIA) a buy or a sell? SCI Engineered Materials Inc is definitely a sell. Based on our DCF analysis, SCI Engineered Materials Inc (SCIA) appears to be overvalued with upside potential of -16.4%. 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 reducing exposure at the current market price of $5.84.