Ranpak Holdings Corp. (PACK) stock intrinsic value fair value estimate & owner earnings analysis

Ranpak makes paper-based protective packaging (void-fill, cushioning and wrapping paper) and end-of-line packaging automation. It places converter machines at end-user facilities and earns most of its revenue selling the paper that runs through them. At the end of 2025 there were about 145,800 machines installed. Revenue was $395.0 million in 2025 (2024: $368.9 million). About 47% came from North America, 45% from Europe and 8% from Asia and other locations. This is a first-time valuation of the company; there is no earlier analysis to compare against. How we measure earnings. We start from cash generated by operations, remove swings in receivables, inventory and payables, and then deduct stock compensation and the capital spending needed to keep the machine fleet running. Ranpak's spending on converter equipment and other property was $30.3 million in 2025 and $33.1 million in 2024, against $55.3 million in 2023. The installed base grew by only 3,100 machines (2.2%) in 2025, so nearly all of this spending replaces and maintains existing equipment. We therefore treat almost all of it as a real cost of staying in business, allowing only a small growth portion in years when revenue rose. In 2025 we also deduct $5.1 million of non-cash warrants granted to two customers (January and August 2025), because they are a real price concession paid in shares. In 2023 the reported stock compensation line was a negative $10.2 million; we counted stock compensation as zero for that year rather than let a negative figure inflate earnings. Cash from operations in 2024 included $16.1 million of one-time patent litigation settlement proceeds that did not recur in 2025. The result is thin. Owner earnings per share were about $0.19 in 2020, $0.14 in 2021, minus $0.47 in 2022, minus $0.29 in 2023, $0.15 in 2024 (including the one-time settlement; about minus $0.05 without it) and minus $0.14 in 2025. The middle of the six-year record is roughly zero. We use all six years because the business has not been transformed by an acquisition or sale in that period, and 2021 and 2022 carried heavy stock-award expense ($22.5 million and $18.3 million) that is a genuine cost to shareholders. Why the earnings are so low. Ranpak carries $410.5 million of debt at a rate of 8.42% (effective 9.30%), and interest expense was $34.3 million in 2025 (2024: $28.6 million). The term loan matures in December 2031. Gross profit fell to $130.7 million in 2025 from $139.8 million in 2024 because of higher production costs. The company reported a net loss of $38.3 million in 2025. Depreciation and amortization of $66.7 million is a non-cash charge that our method does not penalize, but the company still has to spend roughly $30 million a year replacing machines, and we deduct that spending in full. Recent trend. In the first half of 2026 revenue was $206.4 million versus $183.5 million a year earlier (up 12.5%), and cash from operations was $7.1 million versus minus $4.9 million. The net loss was essentially unchanged ($18.1 million versus $18.4 million), so we do not treat the improvement in cash as higher earning power. Two quarters is not enough to lift our earnings level. Owner earnings fell from $0.15 per share in 2024 to minus $0.14 in 2025, mostly because the $16.1 million settlement did not recur. The base case assumes no growth in year one and sits at the six-year median (roughly zero) rather than assuming a rebound; we found no dated, contracted reason in the filings to expect one. Bear case: minus $0.60 per share. Owner earnings stay near the 2025 level of about minus $0.14 per share, requiring roughly $12 million a year of cash. Year-end 2025 cash of $63.0 million and an undrawn $50.0 million revolver (about $44.1 million available) fund about five years of this. That is worth about minus $0.60 per share, after which we credit nothing: the equity has no demonstrated earnings and the $410.5 million term loan comes due in 2031. This is a downside we can build from disclosed facts: a floating-rate debt load and falling gross profit. Base case: $0.02 per share. Owner earnings continue at the level the business has actually produced, which is roughly zero. We give no credit for share gains, new automation products or margin recovery, because none is contracted or a repeated, proven process. On this basis the shares are worth close to nothing, and the company appears to earn about what it costs to run and finance the machine fleet. Bull case: $2.30 per share. Owner earnings return to about $0.14 per share, the level reached in 2021 and not far from 2020's $0.19, and stay there. That would require production costs to ease back so that gross profit recovers, with capital spending staying near $30 million as it did in 2024 and 2025 while revenue grew. We credit no growth beyond that. Distributors representing substantially all distributor revenue have agreed to sell only Ranpak paper products, and more than 90% of revenue in 2022 came from the paper that runs through the installed machines, which supports the durability of the earnings if they are recovered. What could make this wrong. If the higher production costs of 2025 prove temporary and net losses close quickly, the bull case is closer than the base. If interest costs stay high and gross profit keeps falling, the bear case is closer. We could not trace the source of the first-half 2026 cash improvement from the data available, and only the first half of 2026 was available.