ROMJF
Rubicon Organics Inc.
$0.32
Distressed or Transitioning
75%
Current EPS × Depressed Multiple
Strong
·
Conviction
Overvalued
Trading 271.5% above fair value
You pay
$0.32
Bear
$0.06
Fair
$0.08
Bull
$0.11
Bear
$0.06
-82.1%
EPS continues to decline, 5x multiple
Fair
$0.08
-73.1%
Current EPS stabilizes, 8x multiple
Bull
$0.11
-64.1%
Credible recovery, multiple re-rates to 10x
Key Value Driver
Whether the core business model is intact or structurally impaired
Implied Market Multiple
27.9x
Summary
Stock is 42% below 52-week high. Using current EPS at a 8x depressed multiple, base-case value is $0.08. Wide scenario range: $0.06–$0.11.
Warnings
Don't assume past cash flow levels will return — the company's troubles may have permanently reduced its ability to generate profits.
A stock can look cheap on paper and still lose half its value if the underlying business is permanently damaged.
The wide range between our best and worst cases is intentional — pretending to know a precise value for a troubled company would be misleading.
Financial statements were converted from CAD into USD using USDCAD at 0.7246 USD per CAD.
Key Risks
- Bullish DCF projections are fundamentally unknowable for distressed companies
- M&A speculation can floor the stock above intrinsic value temporarily
- Management credibility is a key input — new CEO expands the bull case