Daily Journal (DJCO) AI Stock Analysis

• Market Cap: $629.41M
• Dividend Yield: N/A
• Average Volume (3M): 52.40K
• Price to Earnings (P/E): 6.6
• Beta (1Y): 0.95
• Revenue Growth: 10.54%
• EPS Growth: 115.36%
• Country: US
• Employees: 400
• Sector: Technology
• Sector Strength: 85
• Industry: Software - Application
• EPS (TTM): 10.47
• Shares Outstanding: 1,377,426
• 10 Day Avg. Volume: 55,021
• 30 Day Avg. Volume: 52,400
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): N/A
• P/FCF Ratio: N/A
• Enterprise Value/Market Cap: 0.23
• Enterprise Value/Revenue: 1.81
• Enterprise Value/Gross Profit: 6.17
• Enterprise Value/Ebitda: 1.09
• 1Y Price Target: $450.00
• Price Target Upside: -3.60% Downside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 1

• Rating: 72 Outperform
• Price Target: $450.00 ▼(-3.60% Downside)

Daily Journal's strong financial performance and attractive valuation are the primary drivers of its stock score. However, technical indicators suggest caution due to bearish momentum. The recent corporate event involving an SEC report introduces additional risk, but its impact is mitigated by the company's proactive response.

Daily Journal Business Overview & Revenue Model

Company Description

Daily Journal Corporation publishes newspapers and websites covering in California, Arizona, and Utah. It operates in two segments, Traditional Business and Journal Technologies. The company publishes 10 newspapers of general circulation, including Los Angeles Daily Journal, San Francisco Daily Journal, Daily Commerce, The Daily Recorder, The Inter-City Express, San Jose Post-Record, Orange County Reporter, The Daily Transcript, Business Journal, and The Record Reporter. It also provides specialized information services; and serves as an advertising and newspaper representative for commercial and public notice advertising. In addition, the company offers case management software systems and related products, including eCourt, eProsecutor, eDefender, and eProbation, which are browser-based case processing systems; eFile, a browser-based interface that allows attorneys and the general public to electronically file documents with the court; and ePayIt, a service primarily for the online payment of traffic citations. It provides its software systems and related products for courts; prosecutor and public defender offices; probation departments; and other justice agencies, including administrative law organizations, city and county governments, and bar associations to manage cases and information electronically, to interface with other justice partners, and to extend electronic services to bar members and the public in 42 states and internationally. Daily Journal Corporation was incorporated in 1987 and is based in Los Angeles, California.

How the Company Makes Money

Daily Journal generates revenue through multiple streams, including subscription fees from its newspapers, advertising revenue, and technology services. The company's newspapers attract subscribers, and it earns income from both digital and print advertising. Furthermore, DJCO develops and sells software products tailored for law firms and other professional services, creating a significant revenue stream from licensing and service fees. Strategic partnerships with legal firms and technology providers also enhance its revenue potential, enabling increased distribution of its software solutions and expanding its customer base.

Daily Journal Financial Statement Overview

Summary

Daily Journal presents a strong financial position with growing revenues and solid profitability margins. The absence of debt enhances its financial stability, while consistent free cash flow generation supports its operations. However, fluctuations in profitability and cash flow highlight areas for improvement in maintaining steady financial performance.

Income Statement

The company's revenue has shown consistent growth over the years, with a notable increase in the TTM period to $71.64 million from $67.71 million in 2023. The gross profit margin is strong, reflecting efficient cost management. However, the net profit margin is somewhat volatile, with a significant net income in TTM driven by one-time factors. EBIT and EBITDA margins are healthy, indicating good operational performance.

Balance Sheet

The balance sheet is robust with no debt in the TTM period, significantly reducing financial risk. The equity ratio is high, showcasing strong financial stability and a good buffer for liabilities. The return on equity is also solid, though it has seen fluctuations in past periods. The company's asset base has grown, supporting its expanding operations.

Cash Flow

The company's cash flow position is stable, with positive free cash flow in the TTM period. The operating cash flow to net income ratio indicates that earnings are well-supported by cash operations. However, the free cash flow has experienced variability, highlighting potential challenges in consistent cash generation.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	79.16M	69.93M	67.71M	54.01M	49.39M	49.94M
Gross Profit	23.29M	14.18M	16.01M	11.67M	8.96M	7.30M
EBITDA	132.25M	107.63M	8.87M	-101.06M	4.46M	634.00K
Net Income	96.71M	78.11M	21.45M	-75.62M	112.90M	4.04M
Balance Sheet
Total Assets	494.72M	403.76M	354.86M	319.11M	390.58M	238.57M
Cash, Cash Equivalents and Short-Term Investments	461.72M	371.68M	324.17M	288.95M	360.17M	206.29M
Total Debt	26.00M	28.62M	76.28M	76.43M	33.58M	31.20M
Total Liabilities	145.84M	124.98M	154.39M	140.09M	135.94M	96.83M
Stockholders Equity	348.88M	278.78M	200.47M	179.02M	254.64M	141.74M
Cash Flow
Free Cash Flow	11.89M	-138.00K	15.00M	-5.30M	3.26M	2.15M
Operating Cash Flow	11.93M	-89.00K	15.08M	-5.26M	3.29M	2.34M
Investing Cash Flow	-34.00K	40.53M	-7.26M	-36.76M	-19.99M	16.12M
Financing Cash Flow	-2.66M	-47.66M	-153.00K	42.85M	2.38M	-126.00K

Daily Journal Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 466.80
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For DJCO, the sentiment is Positive. The current price of 466.8 is above the 20-day moving average (MA) of 429.65, above the 50-day MA of 415.48, and above the 200-day MA of 444.42, indicating a bullish trend. The MACD of 14.40 indicates Negative momentum. The RSI at 63.35 is Neutral, neither overbought nor oversold. The STOCH value of 89.02 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for DJCO.

Daily Journal Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
RDVT	76 Outperform	$671.07M	81.83	9.45%	―	22.14%	-45.14%
DJCO	72 Outperform	$629.41M	6.65	32.20%	―	10.54%	115.36%
PRCH	63 Neutral	$1.65B	34.20	75.95%	―	-7.41%	―
Sector *	61 Neutral	$35.62B	7.50	-10.94%	1.87%	8.86%	-10.27%
PUBM	61 Neutral	$380.90M	124.65	-0.65%	―	3.53%	-109.03%
CMRC	58 Neutral	$370.57M	―	-55.85%	―	4.06%	57.50%
BMBL	50 Neutral	$670.87M	―	-75.71%	―	-5.06%	-2318.18%

Daily Journal Corporate Events

Daily Journal Refutes Allegations of Improper Accounting

In July, Daily Journal received allegations from Buxton Helmsley USA, Inc. regarding improper accounting practices related to software development costs. Buxton Helmsley, led by Alexander E. Parker, claimed that capitalizing these costs could benefit shareholders and demanded compensation for this suggestion. However, after a thorough review by the Audit Committee and third-party experts, the company confirmed its compliance with the appropriate accounting standards, ASC 950-20, and refuted Parker’s claims. The company emphasized that its software development, primarily for external use, aligns with ASC 985-20, and not the internal use standard ASC 350-40, which Parker mistakenly referenced. The company criticized Parker’s actions, including demands for board seats and allegations of securities law violations, as misguided and called for an end to his attacks.

Daily Journal Faces SEC Report Amid Accounting Dispute

Daily Journal Corporation recently faced a proposal from Alexander E. Parker of Buxton Helmsley USA, Inc., suggesting the company capitalize software development costs to unlock significant equity value for shareholders. Despite Parker’s demands for a consulting engagement and board seats, the company, which has consistently disclosed its accounting practices, chose to engage an independent accounting consultant to review its methods. This decision led to Parker reporting the company to the SEC and calling for the resignation of its CEO and CFO, actions the company views as unwarranted.