FLEXIBLE SOLUTIONS INTERNATIONAL INC (FSI) stock intrinsic value fair value estimate & owner earnings analysis

Flexible Solutions makes specialty chemicals sold into several durable, non-glamorous niches: a chemical that forms a thin film to slow evaporation from pools, reservoirs and irrigation canals; polymers used to prevent corrosion and mineral scale buildup in pipes for the oil and gas, utility and mining industries; and products that help farmers use less nitrogen fertilizer. None of these depend on a single patent, contract or customer with a known expiration date, and the company has manufacturing plants in Canada, the U.S. and Peru, with a newer presence in Panama. The business has grown in fits and starts. Revenue nearly tripled from about $15 million in 2017 to a peak of roughly $46 million in 2022, before settling back to about $38 million in 2023-2025 as a period of unusually strong specialty-chemical pricing unwound. More recently, both major product lines have seen order volumes decline, and the first half of 2026 showed a further drop in sales and a swing to a net loss, with no specific announced reason to expect that trend to reverse in the near term. We've built our year-one growth assumption around this continued softness rather than assuming an early rebound. We based our valuation on the cash the business actually generates after real, ongoing costs. We made two notable judgment calls. First, a portion of the company's profit and cash flow belongs to outside partners who own minority stakes in some of its subsidiaries; we allocated roughly 20-27% of consolidated cash generation to those partners in recent years, consistent with the company's own reported split. Second, roughly $3-4 million a year of capital spending in 2023-2025 went toward purchasing and building out a manufacturing facility (since partly sold in 2025) rather than toward sustaining today's existing sales, so we treated only a smaller, more typical share of spending as an ongoing cost. Our base case assumes the recent order softness continues through 2026, stabilizes in 2027, and then the business resumes modest low-single-digit growth for the balance of the decade. Because none of the company's core products face a known expiration date, we assumed the business continues generating cash indefinitely beyond our ten-year forecast, but at a very modest, sub-1%-per-year growth rate; this long-run estimate still makes up roughly 60% of our total value estimate. On this basis we estimate the shares are worth around $3.37 today. Our bear case assumes the current downturn deepens meaningfully in 2026 before stabilizing at a lower level for the rest of the decade; worth roughly $1.84 per share. Our bull case assumes the recent cost pressure from scaling up new products proves temporary and growth resumes at a healthier pace similar to the company's better years; worth roughly $6.42 per share. Putting that together, the margin-of-safety price is around $2.36 per share, and it depends on actual evidence — at least one quarter of stabilizing or growing sales in the core product lines. A few things we could not fully reconcile from the filings: cash flow statements for some earlier years grouped several small non-recurring items together with routine adjustments, so we relied on cross-referencing successive years' filings to assign them correctly; readers should treat those older figures as reasonably, but not perfectly, precise.