MeritValue

Drilling Tools International Corp

DTIdata completeness 100%4 fiscal years on file
The thesis, from the filings

Drilling Tools International Corp earns about 20% on invested capital, but has diluted owners by 81% over 4 years — worth asking whether the growth reaches owners. The applicable estimate puts fair value near $2.59 a share.Whether it’s worth owning at today’s price is the last question — and yours to answer, below.

i. The business — what you’d actually own
FigureFY 2022FY 2023FY 2024FY 2025
Revenue$129.6M1$152M2$154.4M3$159.6M3
Net income$21.1M4$14.7M5$3.01M6−$3.76M6
Operating cash flow$14M7$23.3M8$6.06M9$19.9M9
Capital expenditure$24.7M10$43.8M11$22.9M12$20.1M12
Free cash flow (derived)−$10.7M7−$20.4M8−$16.8M9−$224,0009
Total debt—$013$80.5M14$66.6M14
Cash & equivalents$2.35M15$6M16$6.19M17$3.65M17
Diluted shares19.7M25.1M32.3M35.5M

Superscripts are receipts. Each links to the SEC filing the number came from (full list at the bottom).

ii. Your slice — ownership made literal
If you owned
shares
Net assets behind them
$34.58
your share of equity
Profit it earned you last year
−$1.06
Free cash flow it threw off
−$0.06
Debt you’d be carrying
$18.75

10 shares is a claim on $34.58 of net worth that earned you −$1.06 and generated −$0.06 of cash last year, against $18.75 of debt.

iii. Is this a good business?
Moat signal · return on invested capital
20% avg · 4y
FY22 72%FY23 12%FY24 -2%FY25 -1%

It earned an average 20% on invested capital over 4 years. Compare that to what it costs to fund the business.

seeing a moat in the numbers →
Management signal · capital allocation
+81% shares · 4y

Share count is up 81% over 4 years — owners have been diluted. Worth asking what they got for it.

reading capital allocation →

Signals, not verdicts — read from the filings above. Numbers don’t prove a moat; they show its footprint. You decide.

iv. What it’s worth — engine v0.1.0
DCF · Growth Exit 10Y
not applicable
3y-median FCF non-positive — growth-exit DCF not applicable (see EPV)
DCF · Growth Exit 5Y
not applicable
3y-median FCF non-positive — growth-exit DCF not applicable (see EPV)
Earnings Power Value
$2.59
assumptions (8)
  • riskFreeRate4.7%
  • equityRiskPremium5.0%
  • beta100.0%
  • equityWeight85.0%
  • costOfDebtSpread1.5%
  • taxRate21.0%
  • normalizedEarnings$8.88M
  • growthAssumed0.0%
Graham Number
not applicable
diluted EPS missing or non-positive — Graham Number undefined

Different models answer different questions — which to trust when →

Sources — the receipts
  1. 10-K · period ending 2022-12-31 · accession 0000950170-24-037792 (RevenueFromContractWithCustomerExcludingAssessedTax)
  2. 10-K · period ending 2023-12-31 · accession 0000950170-25-039259 (RevenueFromContractWithCustomerExcludingAssessedTax)
  3. 10-K · period ending 2024-12-31 · accession 0001193125-26-095973 (RevenueFromContractWithCustomerExcludingAssessedTax)
  4. 10-K · period ending 2022-12-31 · accession 0000950170-24-037792 (NetIncomeLoss)
  5. 10-K · period ending 2023-12-31 · accession 0000950170-25-039259 (NetIncomeLoss)
  6. 10-K · period ending 2024-12-31 · accession 0001193125-26-095973 (NetIncomeLoss)
  7. 10-K · period ending 2022-12-31 · accession 0000950170-24-037792 (NetCashProvidedByUsedInOperatingActivities)
  8. 10-K · period ending 2023-12-31 · accession 0000950170-25-039259 (NetCashProvidedByUsedInOperatingActivities)
  9. 10-K · period ending 2024-12-31 · accession 0001193125-26-095973 (NetCashProvidedByUsedInOperatingActivities)
  10. 10-K · period ending 2022-12-31 · accession 0000950170-24-037792 (PaymentsToAcquirePropertyPlantAndEquipment)
  11. 10-K · period ending 2023-12-31 · accession 0000950170-25-039259 (PaymentsToAcquirePropertyPlantAndEquipment)
  12. 10-K · period ending 2024-12-31 · accession 0001193125-26-095973 (PaymentsToAcquirePropertyPlantAndEquipment)
  13. 10-K · period ending 2023-12-31 · accession 0000950170-25-039259 (LongTermDebtNoncurrent)
  14. 10-K · period ending 2024-12-31 · accession 0001193125-26-095973 (LongTermDebtNoncurrent)
  15. 10-K · period ending 2022-12-31 · accession 0000950170-24-037792 (CashAndCashEquivalentsAtCarryingValue)
  16. 10-K · period ending 2023-12-31 · accession 0000950170-25-039259 (CashAndCashEquivalentsAtCarryingValue)
  17. 10-K · period ending 2024-12-31 · accession 0001193125-26-095973 (CashAndCashEquivalentsAtCarryingValue)