CEMTREX INC (CETX) DCF Valuation & Fundamental Primer
CEMTREX INC (CETX) trades at $114.18 with a market enterprise value of $165.2M and generated $71.2M in TTM revenue and -$9.6M in free cash flow (filed 2026-08-14 (period ended 2026-06-30)). Our 5-year DCF model estimates an implied intrinsic value of -$168.66 per diluted share (Grade: C · 44/100 · Capital Intensive / Low Margin).
SEC 10-K/10-Q DCF teardown of CEMTREX INC (CETX): $71.2M TTM revenue (15.4% growth), 38.2% GAAP gross margin, -13.5% FCF margin, 0.0% SBC/revenue, and Rule of 40 score of 1.9%.
CEMTREX INC (CETX) earns a "Pass" rating and an institutional Quality Score of 44/100 (Grade C). On $71.2M in baseline revenue (15.4% growth, 38.2% gross margin, -13.5% FCF margin), our 5-year DCF yields an Enterprise Value of -$222.6M (-$168.66/share vs. $114.18 market price). On the R&D Return Benchmark, CETX ranks #15 of 174 (Harvesters · Grade AAA, 1.43× return).
Gross Margin & Unit Economics: CEMTREX INC operates at a 38.2% gross margin on $71.2M revenue (34.2 pts below the Software - Infrastructure median of 72.4%).
R&D Productivity (Harvesters · Grade AAA): Investing 3.1% of revenue in R&D ($2.4M) generates $1.43 of incremental gross profit per R&D dollar (Rank #15 of 174).
Rule of 40 & Cash Conversion: Combining 15.4% top-line growth with -13.5% FCF margin yields a 1.9% Rule of 40 score (vs. 38.4% cohort median) and -$222.6M DCF Enterprise Value.
3-Statement Financial Schedule & 5-Year Horizon
Synchronized directly with the 3-Year Operating Statement (38.2% Gross Margin · 15.4% Growth)
| Income Statement Line | Year 1 (2026) | Year 2 (2027) | Year 3 (2028) |
|---|---|---|---|
| Revenue | $71.2M | $82.1M | $94.8M |
| Cost of Revenue (COGS) | ($44.0M) | ($50.3M) | ($57.6M) |
| Gross Profit & Margin | $27.2M (38.2%) | $31.8M (38.7%) | $37.2M (39.2%) |
| Research & Development (R&D) | $1.8M | $3.9M | $4.4M |
| Sales & Marketing (S&M) | $23.6M | $26.2M | $28.9M |
| General & Administrative (G&A) | $9.2M | $10.2M | $11.3M |
| Operating EBIT | -$7.4M (-10.3%) | -$8.5M (-10.3%) | -$7.4M (-7.8%) |
| Adjusted EBITDA | -$5.2M (-7.3%) | -$6.0M (-7.3%) | -$4.5M (-4.8%) |
3 Key Underwriting Risks
Structural sensitivities monitored in the 3-Statement Financial Engine
Value-Creation Levers · Quantified Statement Impact
Apply any lever below to write its operating assumptions directly into the 3-Statement Model
Automate cloud hosting & support workflows to lift gross margin from 38.2% to 43.2%.
Align R&D intensity and ASC 350-40 capitalization to the R&D Compounders cohort median, recapturing $1.4M in annual EBITDA.
Lift net dollar retention and expansion velocity by +300 bps, compounding Year 3 revenue to $99.8M.
CEMTREX INC (CETX) 3-Scenario DCF Valuation Range
Stress-test CETX's 5-year growth, target FCF margin, WACC, terminal methodology, and SBC/dilution friction in real time.
Simulate how deploying Gemini workflow automation and autonomous engineering expands CETX's Gross Margin, FCF Margin, DCF share price, and 2x2 R&D Return Quadrant.
Split between 5-Year Explicit Cash Flows and Discounted Terminal Value
2D Institutional Valuation Sensitivity Heatmap
Implied share price & upside/downside spread across 25 valuation states (Current Price: $114.18).
| WACC \ Terminal | 1.5% | 2.0% | 2.5% | 3.0% | 3.5% |
|---|---|---|---|---|---|
| 8.5% | $127.45 +12% | $135.87 +19% | $145.70 +28% | $157.31 +38% | $171.25 +50% |
| 9.3% | $113.74 -0% | $120.38 +5% | $127.99 +12% | $136.83 +20% | $147.20 +29% |
| 10.0% | $102.47 -10% | $107.80 -6% | $113.85 -0% | $120.76 +6% | $128.73 +13% |
| 10.8% | $93.04 -19% | $97.40 -15% | $102.29 -10% | $107.81 -6% | $114.10 -0% |
| 11.5% | $85.04 -26% | $88.66 -22% | $92.68 -19% | $97.17 -15% | $102.22 -10% |
Institutional Software Quality Scorecard (44/100 · Grade C)
Weak cash conversion, substantial dilution drag, or constrained financial flexibility.
Negative free cash flow; business consumes cash to sustain operations
Minimal dilution friction; management compensation aligned with shareholders
Sub-par gross margins; higher cost of delivery or hardware/services mix
Leveraged balance sheet coupled with cash burn; heightened refinancing risk
Core Investment Strengths & Moats
- Low dilution friction: SBC is only 0.0% of revenue
Key Operational & Dilution Risks
- Negative free cash flow burn of -$9.6M over trailing twelve months
- Lower software gross margins (38.2%), indicating higher hosting or service delivery drag
- Balance sheet vulnerability: Net debt of $8.7M while operating with cash burn
Audited R&D Intensity is 3.1% of revenue with a 1.43× incremental gross profit return per R&D dollar. Under your current Stage 1 (15.4% CAGR / 38.2% GM) assumptions, CETX projects to 0.62× R&D Return (Grade BBB · Harvesters).
Reverse-DCF Solver: What Growth is Priced Into CETX?
The current share price only requires 5.5% 5-year CAGR (5.5% dilution-adjusted), well below historical growth of 15.4%. If the company maintains baseline execution, there is asymmetric upside.
Headline Reverse-DCF ignores Stock-Based Compensation (0.0% of revenue) and annual share dilution (0.0%/yr). Accounting for both requires 5.5% 5-year revenue CAGR to justify $114.18/sh on a true per-share economic cash flow basis.
CEMTREX INC (CETX) 5-Year Fundamental Forecast
| Statement Line Item | TTM Audited Base | TTM | Y1 | Y2 | Y3 | Y4 | Y5 |
|---|---|---|---|---|---|---|---|
| Revenue | $71.2M | $71.2M | $82.1M | $94.8M | $109.4M | $126.2M | $145.6M |
| Gross Profit | $27.2M | $27.2M | $31.4M | $36.2M | $41.8M | $48.3M | $55.7M |
| Operating Income (EBIT) | -$7.4M | -$7.4M | -$8.5M | -$9.8M | -$11.3M | -$13.0M | -$15.0M |
| Stock-Based Compensation (SBC) | $4.0K | $7.1K | $8.2K | $9.5K | $10.9K | $12.6K | $14.6K |
| Unlevered Free Cash Flow (FCF) | -$9.6M | -$9.6M | -$11.1M | -$12.8M | -$14.8M | -$17.1M | -$19.7M |
| SBC-Adjusted True Cash Flow | -$9.6M | -$9.6M | -$11.1M | -$12.8M | -$14.8M | -$17.1M | -$19.7M |
Software - Infrastructure Peer Comparables & Rule of 40 Regression
Rule of 40 vs. EV / Revenue Multiple Regression
OLS Fit: EV/Rev = 6.6 + 0.05 × (Rule of 40) · R² = 12%Stocks below the gold regression line trade at a discount relative to their Rule of 40 compounding efficiency.
| Company | Ticker | Market Cap | TTM Revenue | Gross Margin | FCF Margin | Rule of 40 | SBC % Rev | EV / Rev |
|---|---|---|---|---|---|---|---|---|
| CEMTREX INC | CETX | $156.6M | $71.2M | 38.2% | -13.5% | 1.9% | 0.0% | 2.3× |
| Block, Inc. | XYZ | $41.67B | $25.04B | 46.4% | 15.5% | 23.7% | 4.8% | 1.6× |
| CoreWeave, Inc. | CRWV | $35.80B | $1.92B | 74.2% | -80.0% | 0.0% | 1.6% | 23.5× |
| VeriSign, Inc. | VRSN | $22.52B | $1.56B | 87.7% | 56.1% | 61.5% | 3.9% | 15.5× |
| CORPAY, INC. | CPAY | $22.17B | $3.97B | 78.1% | 44.4% | 52.1% | 2.9% | 7.2× |
| NetApp, Inc. | NTAP | $21.02B | $7.39B | 70.6% | 22.3% | 24.6% | 5.4% | 3.0× |
| Joint Stock Co Kaspi.kz | KSPI | $11,481.85B | $2,520.93B | 62.3% | 19.3% | 59.8% | — | 4.4× |
| Peer Cohort Median Benchmark (N=6) | 72.4% | 20.8% | 38.4% | 3.9% | 5.8× | |||
EV / Revenue Multiple Compression Stress Test
| Multiple Scenario | EV / Revenue | Implied Enterprise Value | Implied Equity Value | Implied Share Price | Delta vs Current |
|---|---|---|---|---|---|
| Current Multiple | 2.3× | $165.2M | $156.6M | $114.18 | 0.0% |
| -20% Multiple Compression | 1.9× | $132.2M | $123.5M | $90.08 | -20.0% |
| -35% Multiple Compression | 1.5× | $107.4M | $98.7M | $72.01 | -35.0% |
| Software Baseline Floor (5.0× EV/Rev) | 5.0× | $355.8M | $347.2M | $253.18 | +115.4% |
Frequently Asked Questions: CEMTREX INC (CETX) Valuation
What is CEMTREX INC (CETX)'s intrinsic DCF valuation and implied share price?
Based on audited SEC 10-K/10-Q filings and a 5-year 3-statement discounted cash flow (DCF) model, CEMTREX INC (CETX) has a Base Case implied value of -$168.66 per share (with a Bear Case of -$82.81 and a Bull Case of -$280.60), compared to its current price of $114.18. The model discounts projected free cash flows at a 10.0% WACC and a 2.5% terminal growth rate.
What is CEMTREX INC (CETX)'s Rule of 40 score and Free Cash Flow margin?
CEMTREX INC achieves a Rule of 40 score of 1.9%, combining a 15.4% revenue growth run-rate with a -13.5% TTM free cash flow margin on $71.2M in trailing twelve-month revenue. In the Software - Infrastructure peer cohort, the median Rule of 40 benchmark is 38.4%.
What revenue growth rate is priced into CETX stock according to Reverse-DCF analysis?
At $114.18 per share (Enterprise Value of $165.2M), our Reverse-DCF solver indicates the market is pricing in a 5-year implied revenue CAGR of 5.5%, compared to CEMTREX INC's historical CAGR of 15.4%. Overall market expectations are rated as "Substantial Margin of Safety".
What is CEMTREX INC (CETX)'s R&D Return Score and innovation productivity?
CEMTREX INC (CETX) recorded $2.4M in FY R&D expense (3.1% of revenue). Prior-year R&D is below the $10M ranking floor, so R&D Return is marked below R&D floor. The name still carries a fundamentals-only Buy/Watch/Pass grade.
How does CEMTREX INC compare to Software - Infrastructure peers?
CEMTREX INC (CETX) earns an institutional Software Quality Score of 44/100 (Grade C — Capital Intensive / Low Margin). Across its Software - Infrastructure peer group (XYZ, CRWV, VRSN, CPAY, NTAP), the cohort trades at a median EV/TTM Revenue multiple of 5.8× and a median gross margin of 72.4%.
How does Stock-Based Compensation (SBC) impact CEMTREX INC (CETX)'s valuation?
CEMTREX INC recorded $3956 in TTM stock-based compensation (0.0% of revenue). When treating SBC as a cash-equivalent compensation expense, CEMTREX INC's SBC-adjusted free cash flow yield is -6.1%, scoring 25/25 on our Shareholder Dilution Friction pillar.