Fonar Corporation engages in the design, manufacture, sale, and servicing of magnetic resonance imaging (MRI) scanners for the detection and diagnosis of human diseases, abnormalities, and other medical conditions and injuries. It operates in two segments, Medical Equipment, and Physician and Diagnostic Services Management. The company was founded in 1978 and is based in Melville, New York.
FONR Price Forecast Based on DCF Valuation
DCF Fair Value Target:
We started the process of determining a valid price forecast for Fonar Corp with a discounted cash flow analysis -- the results of which can be found in the table below. To summarize, we found that Fonar Corp ranked in the 62th percentile in terms of potential gain offered. Specifically, our DCF analysis implies the stock is trading below its fair value by an estimated 117%. The most interesting components of our discounted cash flow analysis for Fonar Corp ended up being:
The company has produced more trailing twelve month cash flow than only 23.14% of its sector Healthcare.
Fonar Corp's weighted average cost of capital (WACC) is 7%; for context, that number is higher than only 23.65% of tickers in our DCF set.
FONR's estimated cost of debt, based largely on its market capitalization and its interest coverage ratio, is 2%; for context, that number is higher than only 23.65% of tickers in our DCF set.
Terminal Growth Rate in Free Cash Flow
Return Relative to Current Share Price
For other companies in the Healthcare that have a similar discounted cashflow valuation profile (and ensuing price forecasts) as FONR, try PDEX, DYNT, AMN, IONS, and MEDP.