Niagen Bioscience, Inc. (NAGE) stock intrinsic value fair value estimate & owner earnings analysis

Niagen Bioscience (formerly ChromaDex) sells Tru Niagen, a nicotinamide riboside (NAD+ precursor) supplement, mainly online. It also sells Niagen ingredient in bulk to supplement makers and to compounding pharmacies, and has a small analytical-standards business and an early-stage pharmaceuticals research program. It owns a portfolio of nicotinamide riboside patents that expire between 2034 and 2040. Revenue grew from $72.1 million in 2022 to $129.4 million in 2025, and net income moved from a $16.5 million loss to $17.4 million. What we measure. We value the business on owner earnings: operating cash flow, adjusted to remove swings in receivables, inventory and payables, and then reduced by stock-based compensation (a real cost to shareholders) and the small amount of capex needed to stand still. Per share, that comes to about minus $0.22 in 2022, minus $0.04 in 2023, $0.06 in 2024 and $0.17 in 2025. The 2025 figure is boosted because we treat the $11.6 million inventory build as timing rather than a permanent cost, and it includes a low cash tax bill from accumulated tax losses, which will not last indefinitely. We do not count the $64.8 million of cash as extra value. The interest it earns (about $2.1 million in 2025) is already in owner earnings, and there is no debt. Non-cash items in 2025 (a $2.0 million gain from settling a royalty obligation to Queen's University Belfast) and in 2024 (a $3.5 million royalty reversal) do not flow into our figure, because we start from cash flow. Starting level. The business only became profitable recently, so we use 2024 and 2025 as the window and set the normal level at about $0.10 per share (roughly $8 million a year), below the 2025 peak. The first half of 2026 supports the lower figure. Sales were $61.3 million against $61.6 million a year earlier, and net income was $7.3 million against $8.7 million. On a similar basis, first-half owner earnings fell by roughly a third, driven by lower operating cash flow (about $1.6 million against $9.1 million). Owner earnings grew about 190% in 2025, but we assume no growth in year one, because nothing in the filings shows that pace continuing: sales were flat in the first half of 2026 and no contract or capacity addition supports a rebound. Base case, $0.94 a share. Owner earnings hold flat at about $0.10 per share for ten years, then fade to zero over the following ten years as the core patents expire (2034 to 2037 for the main composition patents). We credit no further growth. The recent 21% annual sales growth depends on continued consumer demand and share gains, which are not locked in. What we assume persists is the brand, the direct-to-consumer customer base and the ingredient supply relationships. Bear case, $0.29 a share. Owner earnings fall 5% a year from about $0.05, the 2024 level. Sales are flat in the first half of 2026 and expenses are rising (general and administrative costs rose 47% in 2025). Tax losses run out (a $40.5 million valuation allowance still covers them), so cash taxes rise. The business relies on one molecule sold largely through Amazon and its own website, and patent expiry from 2034 ends the earnings. Bull case, $1.29 a share. Owner earnings grow 8% a year for five years, about a third of the recent sales growth rate, as gross margin (64.3% in 2025, up 2.5 points) and the ingredient business (gross profit up 46% in 2025) continue to contribute. They then hold flat and fade to zero after patent expiry. What could make this wrong: the company has quadrupled owner earnings in two years and may keep growing well beyond what we credit. Against that, inventory rose to $20.4 million and purchase commitments are $23.4 million, so a demand slowdown would hurt cash flow. Elysium Health, a competing nicotinamide riboside seller, is in an ongoing patent case, and a Dartmouth patent suit is unresolved. About $9.5 million of fixed patent-assignment payments run through 2038. Some 2025 cash flow came from collecting a $1.3 million litigation settlement payment. We treated lease payments as an ordinary cost. The margin-of-safety price of $0.50 is roughly a 47% discount to the base case, given the single molecule, patent exposure and litigation.