Daily Journal Corporation (DJCO) DCF Valuation & Fundamental Primer
Daily Journal Corporation (DJCO) currently trades at $551.14 with an enterprise value of $268.7M. Our proprietary institutional model rates Daily Journal Corporation at 80/100 (Grade: A · High-Quality Compounder). The current market price prices in an implied 5-year revenue CAGR of 39.4% vs. historical growth of 11.9% (Aggressive Growth Expectations Priced In).
Institutional fundamental teardown of Daily Journal Corporation (DJCO) covering SEC 10-K/10-Q cash flow conversion, SBC dilution friction, and Reverse-DCF valuation hurdles.
Daily Journal Corporation (DJCO) 3-Scenario DCF Valuation Range
Stress-test DJCO's 5-year growth, target FCF margin, WACC, terminal methodology, and SBC/dilution friction in real time.
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: $551.14).
| WACC \ Terminal | 1.5% | 2.0% | 2.5% | 3.0% | 3.5% |
|---|---|---|---|---|---|
| 8.5% | $231.80 -58% | $245.26 -55% | $260.97 -53% | $279.53 -49% | $301.81 -45% |
| 9.3% | $209.84 -62% | $220.45 -60% | $232.63 -58% | $246.75 -55% | $263.33 -52% |
| 10.0% | $191.78 -65% | $200.31 -64% | $209.97 -62% | $221.02 -60% | $233.76 -58% |
| 10.8% | $176.67 -68% | $183.64 -67% | $191.46 -65% | $200.29 -64% | $210.33 -62% |
| 11.5% | $163.85 -70% | $169.63 -69% | $176.05 -68% | $183.23 -67% | $191.31 -65% |
Institutional Software Quality Scorecard (80/100 · 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
Sub-par gross margins; higher cost of delivery or hardware/services mix
Positive net cash cushion; self-funding operations with zero insolvency risk
Core Investment Strengths & Moats
- High-grade cash conversion: FCF is 140% of EBIT driven by upfront annual collections
- Low dilution friction: SBC is only 0.2% of revenue
- Net cash positive: $20.6M balance sheet buffer
Key Operational & Dilution Risks
- Lower software gross margins (36.7%), indicating higher hosting or service delivery drag
Reverse-DCF Solver: What Growth is Priced Into DJCO?
The current share price demands 39.4% 5-year CAGR (39.6% net of SBC & dilution)—a +27.5% acceleration over historical run-rate (11.9%). Any growth slowdown risks valuation multiple contraction.
Headline Reverse-DCF ignores Stock-Based Compensation (0.2% of revenue) and annual share dilution (0.0%/yr). Accounting for both requires 39.6% 5-year revenue CAGR to justify $551.14/sh on a true per-share economic cash flow basis.
Daily Journal Corporation (DJCO) 5-Year Fundamental Forecast
| Statement Line Item | TTM Audited Base | TTM | Y1 | Y2 | Y3 | Y4 | Y5 |
|---|---|---|---|---|---|---|---|
| Revenue | $87.7M | $87.7M | $98.2M | $109.9M | $122.9M | $137.6M | $154.0M |
| Gross Profit | $32.1M | $32.2M | $36.0M | $40.3M | $45.1M | $50.4M | $56.5M |
| Operating Income (EBIT) | $9.5M | $9.5M | $10.7M | $11.9M | $13.4M | $14.9M | $16.7M |
| Stock-Based Compensation (SBC) | $140.0K | $140.3K | $157.0K | $175.8K | $196.7K | $220.2K | $246.4K |
| Unlevered Free Cash Flow (FCF) | $13.3M | $13.3M | $14.9M | $16.7M | $18.7M | $20.9M | $23.4M |
| SBC-Adjusted True Cash Flow | $13.2M | $13.2M | $14.8M | $16.5M | $18.5M | $20.7M | $23.1M |
Software & Cloud Services Peer Comparables & Rule of 40 Regression
Rule of 40 vs. EV / Revenue Multiple Regression
OLS Fit: EV/Rev = -5.2 + 0.34 × (Rule of 40) · R² = 44%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 |
|---|---|---|---|---|---|---|---|---|
| Daily Journal Corporation | DJCO | $759.2M | $87.7M | 36.7% | 15.2% | 27.1% | 0.2% | 8.4× |
| ServiceNow | NOW | $152.61B | $10.98B | 79.2% | 31.1% | 54.2% | 15.9% | 13.9× |
| Workday, Inc. | WDAY | $50.35B | $8.00B | 75.0% | 27.4% | 43.9% | 19.0% | 6.4× |
| Salesforce | CRM | $217.10B | $37.90B | 77.2% | 32.8% | 42.8% | 8.4% | 5.8× |
| Datadog | DDOG | $46.05B | $2.68B | 80.8% | 31.1% | 57.7% | 21.3% | 17.4× |
| Snowflake Inc. | SNOW | $71.79B | $3.63B | 66.5% | 25.2% | 57.7% | 40.8% | 20.0× |
| Hubspot | HUBS | $19.89B | $2.63B | 85.0% | 21.3% | 52.7% | 19.2% | 7.7× |
| Peer Cohort Median Benchmark (N=6) | 78.2% | 29.2% | 53.5% | 19.1% | 10.8× | |||
EV / Revenue Multiple Compression Stress Test
| Multiple Scenario | EV / Revenue | Implied Enterprise Value | Implied Equity Value | Implied Share Price | Delta vs Current |
|---|---|---|---|---|---|
| Current Multiple | 8.4× | $738.6M | $759.2M | $551.14 | 0.0% |
| -20% Multiple Compression | 6.7× | $590.9M | $611.4M | $443.90 | -20.0% |
| -35% Multiple Compression | 5.5× | $480.1M | $500.7M | $363.47 | -35.0% |
| Software Baseline Floor (5.0× EV/Rev) | 5.0× | $438.5M | $459.1M | $333.28 | -40.6% |
Frequently Asked Questions: Daily Journal Corporation (DJCO) Valuation
What is Daily Journal Corporation (DJCO)'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, Daily Journal Corporation (DJCO) has a Base Case implied value of $210.00 per share (with a Bear Case of $113.39 and a Bull Case of $329.74), compared to its current price of $551.14. The model discounts projected free cash flows at a 10.0% WACC and a 2.5% terminal growth rate.
What is Daily Journal Corporation (DJCO)'s Rule of 40 score and Free Cash Flow margin?
Daily Journal Corporation achieves a Rule of 40 score of 27.1%, combining a 11.9% revenue growth run-rate with a 15.2% TTM free cash flow margin on $87.7M in trailing twelve-month revenue. In the Software & Cloud Services peer cohort, the median Rule of 40 benchmark is 53.5%.
What revenue growth rate is priced into DJCO stock according to Reverse-DCF analysis?
At $551.14 per share (Enterprise Value of $738.6M), our Reverse-DCF solver indicates the market is pricing in a 5-year implied revenue CAGR of 39.4%, compared to Daily Journal Corporation's historical CAGR of 11.9%. Overall market expectations are rated as "Aggressive Growth Expectations Priced In".
How does Daily Journal Corporation compare to Software & Cloud Services software peers?
Daily Journal Corporation (DJCO) earns an institutional Software Quality Score of 80/100 (Grade A — High-Quality Compounder). Across its Software & Cloud Services peer group (NOW, WDAY, CRM, DDOG, SNOW), the cohort trades at a median EV/TTM Revenue multiple of 10.8× and a median gross margin of 78.2%.
How does Stock-Based Compensation (SBC) impact Daily Journal Corporation (DJCO)'s valuation?
Daily Journal Corporation recorded $140,000 in TTM stock-based compensation (0.2% of revenue). When treating SBC as a cash-equivalent compensation expense, Daily Journal Corporation's SBC-adjusted free cash flow yield is 1.7%, scoring 25/25 on our Shareholder Dilution Friction pillar.