DHI GROUP, INC. (DHX) DCF Valuation & Fundamental Primer
DHI GROUP, INC. (DHX) trades at $10.65 with a market enterprise value of $476.5M and generated $124.5M in TTM revenue and $20.1M in free cash flow (filed 2026-08-05 (period ended 2026-06-30)). Our 5-year DCF model estimates an implied intrinsic value of $5.62 per diluted share ($264.6M DCF enterprise value, Grade: A · 79/100 · High-Quality Compounder).
SEC 10-K/10-Q DCF teardown of DHI GROUP, INC. (DHX): $124.5M TTM revenue (1.6% growth), 70.0% GAAP gross margin, 16.2% FCF margin, 3.5% SBC/revenue, and R&D Return Grade D (Faders, $-0.71 new gross profit per $1 prior R&D).
DHI GROUP, INC. (DHX) earns a "Pass" rating and an institutional Quality Score of 82/100 (Grade A). On $124.5M in baseline revenue (1.6% growth, 76.0% gross margin, 16.2% FCF margin), our 5-year DCF yields an Enterprise Value of $264.6M ($5.62/share vs. $10.65 market price). On the R&D Return Benchmark, DHX ranks #173 of 174 (Faders · Grade D, -0.71× return).
Gross Margin & Unit Economics: DHI GROUP, INC. operates at a 76.0% gross margin on $124.5M revenue (+3.3 pts above the Software - Application median of 72.7%).
R&D Productivity (Faders · Grade D): Investing 10.1% of revenue in R&D ($12.8M) generates $-0.71 of incremental gross profit per R&D dollar (Rank #173 of 174).
Rule of 40 & Cash Conversion: Combining 1.6% top-line growth with 16.2% FCF margin yields a 17.8% Rule of 40 score (vs. 47.2% cohort median) and $264.6M DCF Enterprise Value.
3-Statement Financial Schedule & 5-Year Horizon
Synchronized directly with the 3-Year Operating Statement (76.0% Gross Margin · 1.6% Growth)
| Income Statement Line | Year 1 (2026) | Year 2 (2027) | Year 3 (2028) |
|---|---|---|---|
| Revenue | $124.5M | $126.5M | $128.6M |
| Cost of Revenue (COGS) | ($29.9M) | ($29.7M) | ($29.6M) |
| Gross Profit & Margin | $94.6M (76.0%) | $96.8M (76.5%) | $99.0M (77.0%) |
| Research & Development (R&D) | $11.9M | $11.6M | $11.3M |
| Sales & Marketing (S&M) | $55.2M | $53.9M | $52.5M |
| General & Administrative (G&A) | $21.5M | $21.0M | $20.4M |
| Operating EBIT | $6.0M (4.9%) | $10.4M (8.2%) | $14.8M (11.6%) |
| Adjusted EBITDA | $9.2M (7.4%) | $13.5M (10.7%) | $18.1M (14.1%) |
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 76.0% to 81.0%.
Align R&D intensity and ASC 350-40 capitalization to the R&D Compounders cohort median, recapturing $2.5M in annual EBITDA.
Lift net dollar retention and expansion velocity by +300 bps, compounding Year 3 revenue to $136.3M.
DHI GROUP, INC. (DHX) 3-Scenario DCF Valuation Range
Stress-test DHX'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 DHX'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: $10.65).
| WACC \ Terminal | 1.5% | 2.0% | 2.5% | 3.0% | 3.5% |
|---|---|---|---|---|---|
| 8.5% | $6.31 -41% | $6.72 -37% | $7.20 -32% | $7.77 -27% | $8.45 -21% |
| 9.3% | $5.63 -47% | $5.96 -44% | $6.33 -41% | $6.76 -37% | $7.27 -32% |
| 10.0% | $5.08 -52% | $5.34 -50% | $5.63 -47% | $5.97 -44% | $6.36 -40% |
| 10.8% | $4.61 -57% | $4.82 -55% | $5.06 -52% | $5.33 -50% | $5.64 -47% |
| 11.5% | $4.21 -60% | $4.39 -59% | $4.59 -57% | $4.81 -55% | $5.05 -53% |
Institutional Software Quality Scorecard (79/100 · Grade A)
Strong fundamentals, above-average cash generation, and robust competitive positioning.
Elite deferred revenue float; FCF exceeds operating income by >20%
Minimal dilution friction; management compensation aligned with shareholders
Gross profit was not available in the filing snapshot, so unit-economics scoring stays neutral
Manageable debt load covered by recurring positive free cash flow
Core Investment Strengths & Moats
- High-grade cash conversion: FCF is 333% of EBIT driven by upfront annual collections
- Low dilution friction: SBC is only 3.5% of revenue
Key Operational & Dilution Risks
Audited R&D Intensity is 10.0% of revenue with a -0.71× incremental gross profit return per R&D dollar. Under your current Stage 1 (1.6% CAGR / 75.0% GM) assumptions, DHX projects to -0.84× R&D Return (Grade D · Faders).
Reverse-DCF Solver: What Growth is Priced Into DHX?
The current share price demands 16.0% 5-year CAGR (19.0% net of SBC & dilution)—a +14.4% acceleration over historical run-rate (1.6%). Any growth slowdown risks valuation multiple contraction.
Headline Reverse-DCF ignores Stock-Based Compensation (3.5% of revenue) and annual share dilution (0.0%/yr). Accounting for both requires 19.0% 5-year revenue CAGR to justify $10.65/sh on a true per-share economic cash flow basis.
DHI GROUP, INC. (DHX) 5-Year Fundamental Forecast
| Statement Line Item | TTM Audited Base | TTM | Y1 | Y2 | Y3 | Y4 | Y5 |
|---|---|---|---|---|---|---|---|
| Revenue | $124.5M | $124.5M | $126.5M | $128.6M | $130.6M | $132.7M | $134.9M |
| Gross Profit | — | $87.2M | $88.6M | $90.0M | $91.5M | $92.9M | $94.4M |
| Operating Income (EBIT) | $6.0M | $6.1M | $6.1M | $6.2M | $6.3M | $6.5M | $6.6M |
| Stock-Based Compensation (SBC) | $4.4M | $4.4M | $4.5M | $4.5M | $4.6M | $4.7M | $4.8M |
| Unlevered Free Cash Flow (FCF) | $20.1M | $20.1M | $20.4M | $20.8M | $21.1M | $21.4M | $21.8M |
| SBC-Adjusted True Cash Flow | $15.7M | $15.7M | $16.0M | $16.2M | $16.5M | $16.8M | $17.0M |
Software - Application Peer Comparables & Rule of 40 Regression
Rule of 40 vs. EV / Revenue Multiple Regression
OLS Fit: EV/Rev = 6.9 + 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 |
|---|---|---|---|---|---|---|---|---|
| DHI GROUP, INC. | DHX | $448.3M | $124.5M | — | 16.1% | 17.8% | 3.5% | 3.8× |
| 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 | 3.8× | $476.5M | $448.3M | $10.65 | 0.0% |
| -20% Multiple Compression | 3.1× | $381.2M | $353.0M | $8.39 | -20.0% |
| -35% Multiple Compression | 2.5× | $309.7M | $281.5M | $6.69 | -35.0% |
| Software Baseline Floor (5.0× EV/Rev) | 5.0× | $622.7M | $594.4M | $14.12 | +30.7% |
Frequently Asked Questions: DHI GROUP, INC. (DHX) Valuation
What is DHI GROUP, INC. (DHX)'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, DHI GROUP, INC. (DHX) has a Base Case implied value of $5.62 per share (with a Bear Case of $3.27 and a Bull Case of $8.03), compared to its current price of $10.65. The model discounts projected free cash flows at a 10.0% WACC and a 2.5% terminal growth rate.
What is DHI GROUP, INC. (DHX)'s Rule of 40 score and Free Cash Flow margin?
DHI GROUP, INC. achieves a Rule of 40 score of 17.8%, combining a 1.6% revenue growth run-rate with a 16.2% TTM free cash flow margin on $124.5M 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 DHX stock according to Reverse-DCF analysis?
At $10.65 per share (Enterprise Value of $476.5M), our Reverse-DCF solver indicates the market is pricing in a 5-year implied revenue CAGR of 16.0%, compared to DHI GROUP, INC.'s historical CAGR of 1.6%. Overall market expectations are rated as "Aggressive Growth Expectations Priced In".
What is DHI GROUP, INC. (DHX)'s R&D Return Score and innovation productivity?
On the Golden Door Software R&D Return Benchmark, DHI GROUP, INC. (DHX) is ranked #173 out of 174 scored software peers, earning a Grade D in the "Faders" quadrant. DHI GROUP, INC. invests 10.0% of FY revenue into R&D ($12.8M) and generated $-0.71 of incremental gross profit per prior-year R&D dollar.
How does DHI GROUP, INC. compare to Software - Application peers?
DHI GROUP, INC. (DHX) earns an institutional Software Quality Score of 79/100 (Grade A — High-Quality Compounder). 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 DHI GROUP, INC. (DHX)'s valuation?
DHI GROUP, INC. recorded $4.4M in TTM stock-based compensation (3.5% of revenue). When treating SBC as a cash-equivalent compensation expense, DHI GROUP, INC.'s SBC-adjusted free cash flow yield is 3.5%, scoring 25/25 on our Shareholder Dilution Friction pillar.