Research Solutions: Undervalued by 42% with Estimated Fair Value of $5.16

Research Solutions' estimated fair value is $5.16 based on a 2-stage free cash flow to equity model, suggesting it is 42% undervalued at its current share price of $2.98. The analyst price target of $5.33 is only 3.3% higher than the estimated fair value. The discounted cash flow model takes into account two stages of growth, with the first stage having a higher growth rate and the second stage having a stable growth rate. The model assumes companies with shrinking free cash flow will slow their rate of shrinkage, and those with growing free cash flow will see their growth rate slow over time.