BAB, Inc.
AI Valuation
AI-generated fair value estimate for this company.
AI Fair Value
$0.90
Market Price
$0.83
Undervalued By
7.9%
Method: 10-year FCF DCF using net income as a proxy for free cash flow given the franchisor's asset-light, low-capex model: $594.5K trailing net income base; 3% annual growth throughout (mature, saturated bagel/muffin franchise system); 12% discount rate (micro-cap illiquidity); 2% terminal growth; no material net debt; 7.26M shares outstanding
Reasoning: BAB, Inc. is a small, stable royalty-based franchisor (Big Apple Bagels, My Favorite Muffin) with minimal capital needs, so net income closely approximates distributable free cash flow, making a simple net-income-based DCF the most practical rigorous method for this micro-cap