$5.60
$62.51
bear $5.60
base $24.81
bull $62.51
margin of safety $13.65
market price* $170.35
Freedom Holding Corp (bbase cik_id 2113) is a Kazakhstan/Central-Asia-headquartered brokerage, banking, and insurance conglomerate (Freedom Finance) - not Chinese, cannabis, crypto, or a shell, so the DCF proceeds, but this is a 'too hard pile' candidate given jurisdiction and governance risk. Because a broker-dealer's OCF is dominated by client custody/margin flows (FY-ending-March OCF swung from -$1.06B to +$1.68B across FY2024-FY2025 in bbase's xbrl_values), net income is used as owner-earnings proxy, consistent with how such conglomerates are typically valued. FY-ending-March net income: FY2022 $227.5M, FY2023 $205.1M, FY2024 $379.1M, FY2025 $76.3M (an 80% collapse), FY2026 $153.3M (partial recovery) - a 5-year average of ~$208M but with extreme volatility that is itself a red flag. Diluted shares have been comparatively stable (~59M-61M). The company was subject to an August 2023 Hindenburg Research report alleging sanctions evasion and fund commingling tied to Russian clients; an external review completed January 2024 found no evidence supporting the fabricated-revenue allegations, but Kazakhstan regulatory filings still show a history of AML-related penalties, and jurisdiction/political risk is real and ongoing.
Bear case: $60M net income flat (regulatory action or correspondent-banking loss impairs the franchise), 18% discount rate, 1% terminal growth => ~$5.60/share.
Base case: $150M growing 5%/yr, 14% discount rate (elevated for jurisdiction/governance risk), 3% terminal growth => ~$24.81/share.
Bull case: $250M growing 8%/yr (return to FY2024-level earnings power), 12% discount rate, 4% terminal growth => ~$62.51/share - still far below the $142.17 current price (finance.yahoo.com).
Margin of safety applies an extreme 45% margin of safety to the base case, yielding about $13.65/share; even the bull case falls well short of today's price.