DHI GROUP, INC. (DHX) stock intrinsic value fair value estimate & owner earnings analysis

DHI Group runs two online recruiting marketplaces, both sold to employers in the United States on annual and multi-year subscriptions. ClearanceJobs connects defense contractors, federal agencies and national laboratories with people who already hold U.S. government security clearances. Dice is a job board for technology professionals. In 2025 the two were almost the same size: ClearanceJobs brought in $54.9 million of revenue and Dice $72.9 million. They are heading in opposite directions. ClearanceJobs revenue grew from $50.3 million in 2023 to $54.9 million in 2025, rose 9% in the first half of 2026 (helped by the purchase of Point Solutions Group for about $5 million), and its customers renew about 87% of revenue. Dice revenue has fallen every year since 2023, from $101.5 million to $72.9 million, fell another 16% in the first half of 2026, and its renewal rate is only 66%. The paying customer count fell 15% at Dice and 7% at ClearanceJobs over the year to June 2026. How we measured earnings. We start from the cash the business generates, subtract stock-based pay (a real cost to shareholders), and subtract all spending on fixed assets, which here is mostly software development that the company capitalizes. Because revenue is shrinking, we treat all of that spending as the cost of standing still. We ignore the $7.8 million goodwill write-down and $9.6 million intangible write-down taken in 2025, because they are accounting entries for money spent years ago, not cash going out today. On this basis the business earned about $3 million to $4 million a year in 2022 and 2024 and lost about $3 million in 2023, when it spent $20 million on software development. In January 2025 the company split into two separately managed units and cut costs hard. Software spending fell to $7.3 million, stock pay fell by about 40%, and owner earnings rose to $11.8 million ($0.26 a share) even after $6.5 million of restructuring costs. Results before 2022 include businesses that have since been sold, mainly eFinancialCareers, which left in 2021, so we do not use them. We start from 2025 because it is the only full year of the business as it is run today. The first half of 2026 had no restructuring charges and roughly $7 million of owner earnings, which supports a starting level of about $15 million a year. That is still a slower rise than the jump from 2024 to 2025. What the pieces earn. From the company's segment figures, ClearanceJobs keeps roughly 37 to 40 cents of each revenue dollar after its own software spending. Dice keeps roughly 17 to 19 cents. Together they must cover about $18 million a year of shared costs: head office, stock pay, interest on about $32 million of bank debt, and taxes. The whole valuation comes down to whether ClearanceJobs keeps growing faster than Dice shrinks. Base case (about $5.06 per share). Dice revenue keeps falling, by 10% a year through 2029, then 7% and later 5%, and its margin shrinks as it gets smaller, so its profit falls from about $10 million to about $3 million by 2035. ClearanceJobs grows 3% a year, below its recent record, because paying customer numbers are falling even though existing customers spend more each year. Owner earnings dip from about $15 million to about $13 million around 2030 and recover to about $15 million by 2035. After that we give ClearanceJobs no growth and let its earnings fade 1% a year. The reason it lasts is structural: U.S. defense and intelligence contractors must hire people who already hold clearances, and ClearanceJobs is the main marketplace for them. Dice keeps shrinking toward nothing. Future cash is discounted at 6% a year. Bear case (about $1.92 per share). Dice keeps falling at its current pace of 15% a year, and its shrinking revenue wipes out its profit by about 2031. ClearanceJobs stops growing, as it nearly did in 2025 (up 1.4%), because the number of paying customers is already falling. Shared costs come down only a little. Owner earnings drop to about $5 million a year, the bank debt becomes a real burden, and we let what remains fade 3% a year after 2035. Bull case (about $9.09 per share). The 2025 cost cuts hold, and Dice keeps about 17 cents of profit per dollar while its decline slows to 8% a year. Existing customers are already spending about the same each year (98% revenue retention), so the losses come mainly from new business that never arrives. ClearanceJobs grows 6% a year, close to its 2024 rate of 7.5% and helped by bookings up 14% in the first half of 2026. Owner earnings climb to about $28 million by 2035, and ClearanceJobs holds its earnings after that. We give no credit for a recovery in tech hiring, because that depends on the market, not on anything this business controls. What could make this wrong. The main question is Dice. A 66% renewal rate and falling customer counts show no sign of a floor yet, and it is not clear how much of the decline comes from tech hiring and how much from AI tools and other ways of finding candidates. The second question is whether $7 million a year of software spending is enough to keep both platforms competitive. In 2025 it was only about half of the $14.2 million of depreciation on past software spending. If spending has to go back toward $15 million to $20 million, most of the recent improvement disappears. ClearanceJobs growth depends on U.S. defense and intelligence contractors continuing to hire. The first-half 2026 cash-flow detail we had was incomplete, so the six-month figure is an estimate. The full-year numbers reconcile to the audited statements. The margin-of-safety price of about $2.40 a share, roughly half of the base case and a little above the bear case, allows for the real chance that Dice keeps shrinking faster than ClearanceJobs grows.