Daily Journal Corp (NASDAQ: DJCO)

Sector: Technology Industry: Software - Application CIK: 0000783412
Market Cap 801.94 Mn
P/B 2.05
P/E 7.15
P/S 9.14
ROIC (Qtr) 1.83
Div Yield % 0.00
Rev 1y % (Qtr) 42.98
Total Debt (Qtr) 22.96 Mn
Debt/Equity (Qtr) 0.06

About

Daily Journal Corporation (DJCO) operates in the publishing and case management software industry, with its main business activities divided into two segments: the Traditional Business and Journal Technologies. The Traditional Business segment focuses on publishing newspapers and specialized information publications, while the Journal Technologies segment provides case management software systems and related products to various justice agencies. In the Traditional Business segment, DJCO publishes 10 newspapers of general circulation, including...

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Price action

Investment thesis

Bull case

  • Strong operating cash flow of 13.33M provides robust 0.58x coverage of total debt 22.96M, indicating excellent debt servicing capability and financial flexibility.
  • Healthy cash reserves of 22.84M provide 135.14x coverage of short-term debt 169000, demonstrating strong liquidity position and minimal refinancing risk.
  • Strong tangible asset base of 548.12M provides 23.88x coverage of total debt 22.96M, indicating robust asset backing and low credit risk.
  • Operating cash flow of 13.33M provides strong 95.24x coverage of stock compensation 140000, indicating sustainable incentive practices.
  • Robust free cash flow of 13.32M exceeds capital expenditure of 8000 by 1665.62x, indicating strong organic growth funding capability.

Bear case

  • Operating cash flow of 13.33M barely covers its investment activities of (8000), with a coverage ratio of -1666.62, indicating heavy reliance on external financing for growth which may not be sustainable in a tighter credit environment.
  • Operating cash flow of 13.33M provides insufficient coverage of deferred revenue obligations of 17.42M, which is 0.77x, raising concerns about future service delivery capabilities.
  • Short-term investments of 493M significantly exceed cash reserves of 22.84M, which is 21.59x, indicating potentially excessive yield-seeking behavior at the expense of liquidity.
  • Operating cash flow of 13.33M provides minimal 0.35x coverage of tax expenses of 37.95M, suggesting potential tax planning inefficiencies or unsustainable tax positions.
  • Free cash flow of 13.32M represents just -2.35x of debt issuance (5.66M), suggesting concerning reliance on leverage rather than internal cash generation for growth.

Segments Breakdown of Revenue (2025)

Segments Breakdown of Revenue (2025)

Peer comparison

Companies in the Software - Application
S.No. Ticker Company Market Cap P/E P/S Total Debt (Qtr)
1 SAP Sap Se 281.21 Bn 33.75 6.55 10.73 Bn
2 CRM Salesforce, Inc. 248.88 Bn 34.46 6.17 11.14 Bn
3 SHOP Shopify Inc. 217.18 Bn 121.94 20.30 1.12 Bn
4 UBER Uber Technologies, Inc 182.87 Bn 10.99 3.69 12.19 Bn
5 INTU Intuit Inc. 182.36 Bn 44.28 9.38 6.78 Bn
6 NOW ServiceNow, Inc. 151.53 Bn 87.54 11.96 2.40 Bn
7 ADBE Adobe Inc. 146.69 Bn 21.08 6.33 6.64 Bn
8 ADP Automatic Data Processing Inc 108.05 Bn 26.12 5.17 9.77 Bn

Industry comparisons

Current Valuation Value Ind Avg Percentile
EV to Assets EV to Assets 1.47 2.68
EV to Cash from Ops. EV/CFO 60.53 13.34
EV to Debt EV to Debt 35.15 57.60
EV to EBIT EV/EBIT 5.33 19.20
EV to EBITDA EV/EBITDA 82.47 15.11
EV to Free Cash Flow [EV/FCF] EV/FCF 60.56 14.78
EV to Market Cap EV to Market Cap 1.01 -93.16
EV to Revenue EV/Rev 9.20 4.63
Price to Book Value [P/B] P/B 2.05 4.29
Price to Earnings [P/E] P/E 7.15 -132.44
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Dividend Coverage Ratio 0.00 -3.95
Dividend Payout Ratio % Div Payout % (Qtr) 0.00 4.25
Dividend per Basic Share Div per Share (Qtr) 0.00 0.15
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr) 0.00 2.52
Interest Coverage Int. cover (Qtr) 109.68 -52.32
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) 82.22 -259.78
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) 50.48 9,763.58
Dividend Growth (1y) % Dividend Growth (1y) % 0.00 1.61
EBIAT Growth (1y) % EBIAT 1y % (Qtr) 40.71 -263.15
EBITDA Growth (1y) % EBITDA 1y % (Qtr) 125.62 56.46
EBIT Growth (1y) % EBIT 1y % (Qtr) 41.08 -225.15
EBT Growth (1y) % EBT 1y % (Qtr) 43.93 -86.10
EPS Growth (1y) % EPS 1y % (Qtr) 43.50 123.84
FCF Growth (1y) % FCF 1y % (Qtr) 10,044.03 -36.82
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) 27.75 95.08
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 0.16 0.58
Cash Payout Ratio Cash Payout (Qtr) 0.00 0.02
Cash Ratio Cash Ratio (Qtr) 0.59 3.75
Current Ratio Curr Ratio (Qtr) 13.89 8.16
Debt to Equity Ratio Debt/Equity (Qtr) 0.06 0.17
Interest Cover Ratio Int Coverage (Qtr) 109.68 -52.32
Times Interest Earned Times Interest Earned (Qtr) 109.68 -52.32
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) 173.00 -100.06
EBIT Margin % EBIT Margin % (Qtr) 172.71 -164.24
EBT Margin % EBT Margin % (Qtr) 171.14 -116.94
Gross Margin % Gross Margin % (Qtr) 87.70 58.20
Net Profit Margin % Net Margin % (Qtr) 127.90 -121.65