MicroAlgo Inc. (MLGO) DCF Valuation & Fundamental Primer
MicroAlgo Inc. (MLGO) trades at $4.93 with a market enterprise value of $197.0M and generated $60.0M in TTM revenue and $2.5M in free cash flow (filed 2024-09-25 (period ended 2023-06-30)). Our 5-year DCF model estimates an implied intrinsic value of $0.94 per diluted share ($21.8M DCF enterprise value, Grade: B+ · 73/100 · Quality Software Operator).
SEC 10-K/10-Q DCF teardown of MicroAlgo Inc. (MLGO): $60.0M TTM revenue (-7.5% growth), 51.3% GAAP gross margin, 4.1% FCF margin, 15.0% SBC/revenue, and Rule of 40 score of -3.4%.
MicroAlgo Inc. (MLGO) earns a "Pass" rating and an institutional Quality Score of 64/100 (Grade B+). On $60.0M in baseline revenue (-7.5% growth, 51.3% gross margin, 4.1% FCF margin), our 5-year DCF yields an Enterprise Value of $21.8M ($0.94/share vs. $4.93 market price). On the R&D Return Benchmark, MLGO ranks #169 of 174 (Faders · Grade D, -0.38× return).
Gross Margin & Unit Economics: MicroAlgo Inc. operates at a 51.3% gross margin on $60.0M revenue (21.2 pts below the Software - Infrastructure median of 72.4%).
R&D Productivity (Faders · Grade D): Investing 15.0% of revenue in R&D ($9.0M) generates $-0.38 of incremental gross profit per R&D dollar (Rank #169 of 174).
Rule of 40 & Cash Conversion: Combining -7.5% top-line growth with 4.1% FCF margin yields a -3.4% Rule of 40 score (vs. 38.4% cohort median) and $21.8M DCF Enterprise Value.
3-Statement Financial Schedule & 5-Year Horizon
Synchronized directly with the 3-Year Operating Statement (51.3% Gross Margin · -7.5% Growth)
| Income Statement Line | Year 1 (2026) | Year 2 (2027) | Year 3 (2028) |
|---|---|---|---|
| Revenue | $60.0M | $55.5M | $51.4M |
| Cost of Revenue (COGS) | ($29.3M) | ($26.8M) | ($24.5M) |
| Gross Profit & Margin | $30.8M (51.3%) | $28.7M (51.8%) | $26.8M (52.3%) |
| Research & Development (R&D) | $12.6M | $11.2M | $9.9M |
| Sales & Marketing (S&M) | $10.8M | $9.6M | $8.5M |
| General & Administrative (G&A) | $4.2M | $3.7M | $3.3M |
| Operating EBIT | $3.2M (5.3%) | $4.2M (7.6%) | $5.1M (10.0%) |
| Adjusted EBITDA | $4.7M (7.8%) | $5.6M (10.1%) | $6.4M (12.5%) |
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 51.3% to 56.3%.
Align R&D intensity and ASC 350-40 capitalization to the R&D Compounders cohort median, recapturing $1.2M in annual EBITDA.
Lift net dollar retention and expansion velocity by +300 bps, compounding Year 3 revenue to $54.8M.
MicroAlgo Inc. (MLGO) 3-Scenario DCF Valuation Range
Stress-test MLGO'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 MLGO'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: $4.93).
| WACC \ Terminal | 1.5% | 2.0% | 2.5% | 3.0% | 3.5% |
|---|---|---|---|---|---|
| 8.5% | $1.77 -64% | $1.84 -63% | $1.93 -61% | $2.03 -59% | $2.15 -56% |
| 9.3% | $1.64 -67% | $1.70 -65% | $1.77 -64% | $1.85 -63% | $1.94 -61% |
| 10.0% | $1.54 -69% | $1.59 -68% | $1.64 -67% | $1.70 -65% | $1.77 -64% |
| 10.8% | $1.46 -70% | $1.50 -70% | $1.54 -69% | $1.59 -68% | $1.64 -67% |
| 11.5% | $1.39 -72% | $1.42 -71% | $1.45 -70% | $1.49 -70% | $1.54 -69% |
Institutional Software Quality Scorecard (73/100 · Grade B+)
Solid software model with clear operating leverage, partially offset by standard SBC or moderate burn.
Solid cash generation with minor working capital absorption
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
- Low dilution friction: SBC is only 0.0% of revenue
- Net cash positive: $19.2M balance sheet buffer
Key Operational & Dilution Risks
- Lower software gross margins (51.3%), indicating higher hosting or service delivery drag
Audited R&D Intensity is 15.0% of revenue with a -0.38× incremental gross profit return per R&D dollar. Under your current Stage 1 (-7.5% CAGR / 51.3% GM) assumptions, MLGO projects to 1.44× R&D Return (Grade AAA · Harvesters).
Reverse-DCF Solver: What Growth is Priced Into MLGO?
The current share price demands 13.9% 5-year CAGR (13.9% net of SBC & dilution)—a +21.5% acceleration over historical run-rate (-7.5%). Any growth slowdown risks valuation multiple contraction.
Headline Reverse-DCF ignores Stock-Based Compensation (0.0% of revenue) and annual share dilution (0.0%/yr). Accounting for both requires 13.9% 5-year revenue CAGR to justify $4.93/sh on a true per-share economic cash flow basis.
MicroAlgo Inc. (MLGO) 5-Year Fundamental Forecast
| Statement Line Item | TTM Audited Base | TTM | Y1 | Y2 | Y3 | Y4 | Y5 |
|---|---|---|---|---|---|---|---|
| Revenue | $60.0M | $60.0M | $55.5M | $51.4M | $47.5M | $44.0M | $40.7M |
| Gross Profit | $30.8M | $30.8M | $28.5M | $26.3M | $24.4M | $22.5M | $20.8M |
| Operating Income (EBIT) | $3.2M | $3.2M | $2.9M | $2.7M | $2.5M | $2.3M | $2.2M |
| Stock-Based Compensation (SBC) | — | $3.0M | $2.8M | $2.6M | $2.4M | $2.2M | $2.0M |
| Unlevered Free Cash Flow (FCF) | $2.5M | $2.5M | $2.3M | $2.1M | $2.0M | $1.8M | $1.7M |
| SBC-Adjusted True Cash Flow | — | -$522.4K | -$483.2K | -$447.0K | -$413.4K | -$382.4K | -$353.8K |
Software - Infrastructure 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 |
|---|---|---|---|---|---|---|---|---|
| MicroAlgo Inc. | MLGO | $216.2M | $60.0M | 51.3% | 4.1% | -3.4% | — | 3.3× |
| 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 | 3.3× | $197.0M | $216.2M | $4.93 | 0.0% |
| -20% Multiple Compression | 2.6× | $157.6M | $176.8M | $4.03 | -20.0% |
| -35% Multiple Compression | 2.1× | $128.1M | $147.3M | $3.36 | -35.0% |
| Software Baseline Floor (5.0× EV/Rev) | 5.0× | $300.2M | $319.4M | $7.28 | +52.4% |
Frequently Asked Questions: MicroAlgo Inc. (MLGO) Valuation
What is MicroAlgo Inc. (MLGO)'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, MicroAlgo Inc. (MLGO) has a Base Case implied value of $0.94 per share (with a Bear Case of $0.82 and a Bull Case of $1.03), compared to its current price of $4.93. The model discounts projected free cash flows at a 10.0% WACC and a 2.5% terminal growth rate.
What is MicroAlgo Inc. (MLGO)'s Rule of 40 score and Free Cash Flow margin?
MicroAlgo Inc. achieves a Rule of 40 score of -3.4%, combining a -7.5% revenue growth run-rate with a 4.1% TTM free cash flow margin on $60.0M 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 MLGO stock according to Reverse-DCF analysis?
At $4.93 per share (Enterprise Value of $197.0M), our Reverse-DCF solver indicates the market is pricing in a 5-year implied revenue CAGR of 13.9%, compared to MicroAlgo Inc.'s historical CAGR of -7.5%. Overall market expectations are rated as "Aggressive Growth Expectations Priced In".
What is MicroAlgo Inc. (MLGO)'s R&D Return Score and innovation productivity?
MicroAlgo Inc. (MLGO) recorded $9.0M in FY R&D expense (15.0% of revenue) and $15.5M in FY gross profit. It is currently unranked on the letter-grade leaderboard (stale data).
How does MicroAlgo Inc. compare to Software - Infrastructure peers?
MicroAlgo Inc. (MLGO) earns an institutional Software Quality Score of 73/100 (Grade B+ — Quality Software Operator). 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 MicroAlgo Inc. (MLGO)'s valuation?
MicroAlgo Inc. recorded N/A in TTM stock-based compensation (15.0% of revenue). When treating SBC as a cash-equivalent compensation expense, MicroAlgo Inc.'s SBC-adjusted free cash flow yield is 1.1%, scoring 25/25 on our Shareholder Dilution Friction pillar.