CREATIVE REALITIES, INC. (CREX) DCF Valuation & Fundamental Primer
CREATIVE REALITIES, INC. (CREX) trades at $15.06 with a market enterprise value of $195.1M and generated $72.3M in TTM revenue and -$10.2M in free cash flow (filed 2026-08-14 (period ended 2026-06-30)). Our 5-year DCF model estimates an implied intrinsic value of -$45.80 per diluted share (Grade: C · 44/100 · Capital Intensive / Low Margin).
SEC 10-K/10-Q DCF teardown of CREATIVE REALITIES, INC. (CREX): $72.3M TTM revenue (32.7% growth), 41.7% GAAP gross margin, -14.1% FCF margin, 2.3% SBC/revenue, and Rule of 40 score of 18.7%.
CREATIVE REALITIES, INC. (CREX) earns a "Watch" rating and an institutional Quality Score of 44/100 (Grade C). On $72.3M in baseline revenue (32.7% growth, 41.7% gross margin, -14.1% FCF margin), our 5-year DCF yields an Enterprise Value of -$448.1M (-$45.80/share vs. $15.06 market price). On the R&D Return Benchmark, CREX ranks #56 of 174 (Compounders · Grade BBB, 0.65× return).
Gross Margin & Unit Economics: CREATIVE REALITIES, INC. operates at a 41.7% gross margin on $72.3M revenue (31.0 pts below the Software - Application median of 72.7%).
R&D Productivity (Compounders · Grade BBB): Investing 21.0% of revenue in R&D ($15.2M) generates $0.65 of incremental gross profit per R&D dollar (Rank #56 of 174).
Rule of 40 & Cash Conversion: Combining 32.7% top-line growth with -14.1% FCF margin yields a 18.7% Rule of 40 score (vs. 47.2% cohort median) and -$448.1M DCF Enterprise Value.
3-Statement Financial Schedule & 5-Year Horizon
Synchronized directly with the 3-Year Operating Statement (41.7% Gross Margin · 32.7% Growth)
| Income Statement Line | Year 1 (2026) | Year 2 (2027) | Year 3 (2028) |
|---|---|---|---|
| Revenue | $72.3M | $96.0M | $127.4M |
| Cost of Revenue (COGS) | ($42.2M) | ($55.5M) | ($73.0M) |
| Gross Profit & Margin | $30.1M (41.7%) | $40.5M (42.2%) | $54.4M (42.7%) |
| Research & Development (R&D) | $15.2M | $19.4M | $24.6M |
| Sales & Marketing (S&M) | $22.1M | $28.2M | $35.8M |
| General & Administrative (G&A) | $8.6M | $11.0M | $13.9M |
| Operating EBIT | -$15.8M (-21.8%) | -$18.0M (-18.8%) | -$20.0M (-15.7%) |
| Adjusted EBITDA | -$14.0M (-19.3%) | -$15.6M (-16.3%) | -$16.8M (-13.2%) |
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 41.7% to 46.7%.
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 $133.3M.
CREATIVE REALITIES, INC. (CREX) 3-Scenario DCF Valuation Range
Stress-test CREX'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 CREX'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: $15.06).
| WACC \ Terminal | 1.5% | 2.0% | 2.5% | 3.0% | 3.5% |
|---|---|---|---|---|---|
| 8.5% | $30.27 +101% | $32.50 +116% | $35.11 +133% | $38.19 +154% | $41.88 +178% |
| 9.3% | $26.66 +77% | $28.42 +89% | $30.44 +102% | $32.78 +118% | $35.53 +136% |
| 10.0% | $23.70 +57% | $25.11 +67% | $26.72 +77% | $28.55 +90% | $30.66 +104% |
| 10.8% | $21.22 +41% | $22.38 +49% | $23.68 +57% | $25.14 +67% | $26.81 +78% |
| 11.5% | $19.13 +27% | $20.09 +33% | $21.15 +40% | $22.34 +48% | $23.68 +57% |
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 2.3% of revenue
Key Operational & Dilution Risks
- Negative free cash flow burn of -$10.2M over trailing twelve months
- Lower software gross margins (41.7%), indicating higher hosting or service delivery drag
- Balance sheet vulnerability: Net debt of $35.9M while operating with cash burn
Compare CREATIVE REALITIES, INC. (CREX) against the software universe on the 2x2 R&D Return vs. R&D Intensity matrix.
Reverse-DCF Solver: What Growth is Priced Into CREX?
The current share price only requires 9.1% 5-year CAGR (11.0% dilution-adjusted), well below historical growth of 32.7%. If the company maintains baseline execution, there is asymmetric upside.
Headline Reverse-DCF ignores Stock-Based Compensation (2.3% of revenue) and annual share dilution (0.0%/yr). Accounting for both requires 11.0% 5-year revenue CAGR to justify $15.06/sh on a true per-share economic cash flow basis.
CREATIVE REALITIES, INC. (CREX) 5-Year Fundamental Forecast
| Statement Line Item | TTM Audited Base | TTM | Y1 | Y2 | Y3 | Y4 | Y5 |
|---|---|---|---|---|---|---|---|
| Revenue | $72.3M | $72.3M | $96.0M | $127.4M | $169.1M | $224.5M | $298.0M |
| Gross Profit | $30.1M | $30.1M | $40.0M | $53.1M | $70.5M | $93.6M | $124.2M |
| Operating Income (EBIT) | -$15.8M | -$15.8M | -$20.9M | -$27.8M | -$36.9M | -$48.9M | -$65.0M |
| Stock-Based Compensation (SBC) | $1.6M | $1.6M | $2.2M | $2.9M | $3.8M | $5.1M | $6.8M |
| Unlevered Free Cash Flow (FCF) | -$10.2M | -$10.2M | -$13.5M | -$17.9M | -$23.8M | -$31.6M | -$41.9M |
| SBC-Adjusted True Cash Flow | -$11.8M | -$11.8M | -$15.7M | -$20.8M | -$27.6M | -$36.7M | -$48.7M |
Software - Application Peer Comparables & Rule of 40 Regression
Rule of 40 vs. EV / Revenue Multiple Regression
OLS Fit: EV/Rev = 6.8 + 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 |
|---|---|---|---|---|---|---|---|---|
| CREATIVE REALITIES, INC. | CREX | $159.2M | $72.3M | 41.7% | -14.1% | 18.7% | 2.3% | 2.7× |
| Grab Holdings Limited | GRAB | $20.18B | $2.80B | 42.0% | 27.7% | 84.0% | 10.0% | 6.3× |
| Figma, Inc. | FIG | $18.07B | $749.0M | 88.3% | -9.2% | 39.1% | 126.5% | 23.5× |
| Full Truck Alliance Co. Ltd. | YMM | $71.73B | $11.24B | 86.6% | 25.8% | 70.2% | 4.4% | 5.9× |
| ServiceTitan, Inc. | TTAN | $9.97B | $771.9M | 64.9% | 2.0% | 30.5% | 21.2% | 12.5× |
| InterDigital, Inc. | IDCC | $8.65B | $868.5M | 80.5% | 30.6% | 55.3% | 5.3% | 9.9× |
| OPEN TEXT CORP | OTEX | $8.11B | $5.30B | 63.5% | 13.0% | 23.8% | 2.0% | 2.6× |
| Peer Cohort Median Benchmark (N=6) | 72.7% | 19.4% | 47.2% | 7.6% | 8.1× | |||
EV / Revenue Multiple Compression Stress Test
| Multiple Scenario | EV / Revenue | Implied Enterprise Value | Implied Equity Value | Implied Share Price | Delta vs Current |
|---|---|---|---|---|---|
| Current Multiple | 2.7× | $195.1M | $159.2M | $15.06 | 0.0% |
| -20% Multiple Compression | 2.2× | $156.1M | $120.1M | $11.37 | -20.0% |
| -35% Multiple Compression | 1.8× | $126.8M | $90.9M | $8.60 | -35.0% |
| Software Baseline Floor (5.0× EV/Rev) | 5.0× | $361.6M | $325.7M | $30.82 | +85.3% |
Frequently Asked Questions: CREATIVE REALITIES, INC. (CREX) Valuation
What is CREATIVE REALITIES, INC. (CREX)'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, CREATIVE REALITIES, INC. (CREX) has a Base Case implied value of -$45.80 per share (with a Bear Case of -$18.09 and a Bull Case of -$90.28), compared to its current price of $15.06. The model discounts projected free cash flows at a 10.0% WACC and a 2.5% terminal growth rate.
What is CREATIVE REALITIES, INC. (CREX)'s Rule of 40 score and Free Cash Flow margin?
CREATIVE REALITIES, INC. achieves a Rule of 40 score of 18.7%, combining a 32.7% revenue growth run-rate with a -14.1% TTM free cash flow margin on $72.3M in trailing twelve-month revenue. In the Software - Application peer cohort, the median Rule of 40 benchmark is 47.2%.
What revenue growth rate is priced into CREX stock according to Reverse-DCF analysis?
At $15.06 per share (Enterprise Value of $195.1M), our Reverse-DCF solver indicates the market is pricing in a 5-year implied revenue CAGR of 9.1%, compared to CREATIVE REALITIES, INC.'s historical CAGR of 32.7%. Overall market expectations are rated as "Substantial Margin of Safety".
What is CREATIVE REALITIES, INC. (CREX)'s R&D Return Score and innovation productivity?
CREATIVE REALITIES, INC. (CREX) recorded N/A in FY R&D expense (tracked from SEC filings) and $25.7M in FY gross profit. It is currently unranked on the letter-grade leaderboard (pending full multi-year XBRL R&D history).
How does CREATIVE REALITIES, INC. compare to Software - Application peers?
CREATIVE REALITIES, INC. (CREX) earns an institutional Software Quality Score of 44/100 (Grade C — Capital Intensive / Low Margin). Across its Software - Application peer group (GRAB, FIG, YMM, TTAN, IDCC), the cohort trades at a median EV/TTM Revenue multiple of 8.1× and a median gross margin of 72.7%.
How does Stock-Based Compensation (SBC) impact CREATIVE REALITIES, INC. (CREX)'s valuation?
CREATIVE REALITIES, INC. recorded $1.6M in TTM stock-based compensation (2.3% of revenue). When treating SBC as a cash-equivalent compensation expense, CREATIVE REALITIES, INC.'s SBC-adjusted free cash flow yield is -7.4%, scoring 25/25 on our Shareholder Dilution Friction pillar.