As of June 21, 2025, Talon International Inc's estimated intrinsic value ranges from $0.07 to $0.19 per share, depending on the valuation methodology applied.
| Valuation Method | Fair Value (USD) | Implied Upside/Downside |
|---|---|---|
| Discounted Cash Flow (10Y) | $0.07 | +57.0% |
| Discounted Cash Flow (5Y) | $0.07 | +50.6% |
| Dividend Discount Model (Multi-Stage) | $0.15 | +238.7% |
| Dividend Discount Model (Stable) | $0.07 | +46.6% |
| Earnings Power Value | $0.19 | +327.2% |
Is Talon International Inc (TALN) undervalued or overvalued?
With the current market price at $0.04, 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 Talon International Inc'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 | 0.43 | 1.26 |
| Cost of equity | 5.9% | 11.9% |
| Cost of debt | 4.5% | 228.3% |
| Tax rate | 26.2% | 27.0% |
| Debt/Equity ratio | 0.99 | 0.99 |
| After-tax WACC | 4.6% | 88.8% |
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 | $0 | $5M | 17.9% |
| 10-Year Growth | $0 | $6M | 2.9% |
| 5-Year EBITDA | $0 | $9M | 51.6% |
| 10-Year EBITDA | $0 | $6M | 12.7% |
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 | $1M |
| Discount Rate (WACC) | 88.8% - 4.6% |
| Enterprise Value | $2M - $32M |
| Net Debt | $(1)M |
| Equity Value | $2M - $33M |
| Outstanding Shares | 92M |
| Fair Value | $0 - $0 |
| Selected Fair Value | $0.19 |
| Metric | Value |
|---|---|
| Market Capitalization | $4M |
| Enterprise Value | $3M |
| Trailing P/E | 8.33 |
| Forward P/E | 2.96 |
| Trailing EV/EBITDA | 7.75 |
| Current Dividend Yield | 62.96% |
| Dividend Growth Rate (5Y) | 0.00% |
| Debt-to-Equity Ratio | 0.99 |
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% | $0.02 |
| Discounted Cash Flow (5Y) | 25% | $0.02 |
| Dividend Discount Model (Multi-Stage) | 20% | $0.03 |
| Dividend Discount Model (Stable) | 15% | $0.01 |
| Earnings Power Value | 10% | $0.02 |
| Weighted Average | 100% | $0.10 |
Based on our comprehensive valuation analysis, Talon International Inc's weighted average intrinsic value is $0.10, which is approximately 117.2% above the current market price of $0.04.
Key investment considerations:
Given these factors, we believe Talon International Inc is currently significantly undervalued with the potential for long-term appreciation based on the company's growth trajectory and financial strength.