DLH Holdings Corp. (DLHC): fair value, margin of safety and Wheel Score

Is DLHC undervalued?

DLHC has a margin of safety of 80%: the stock closed at 4.00 on 16 Oct 2026 against a GLS average fair value of 20.32. 2 of the 2 valuation models that produced a number sit above the price. Our screens treat a discount this large as a strong starting point for a cash-secured put, not as a verdict - the fair value is a model output, and a wide gap can mean the models are missing something the market knows.

The average is built from just 2 models (DCF, 10 Cap) - the rest returned nothing because an input they need (dividends, free cash flow, book value) is zero or negative - so treat it with more caution than usual.

The nightly engine files DLHC under Speculative / Distressed - negative earnings or a Piotroski score of 3 or less - which caps its Wheel Score at 45 and keeps it out of the Sunday Scan.

Nine valuation models for DLHC

Each model turns the latest filed numbers into a value per share; the GLS fair value is the simple average of the ones that produce a positive number. The last two rows are shown for reference and never enter the average. The Quote page lets you switch any model off and add your own margin of safety.

Quality and financial health

DLH Holdings Corp. scores only 3 of 9 on the Piotroski F-score, which fails the Sunday Scan's "6 or more" rule. A reading this low means several of the basic tests - positive earnings, positive operating cash flow, falling debt, no new share issuance - are not met. A GLS Moat score of 2.1/10 is a weak reading: the ten-year history the score grades (revenue, EPS, book value, margins, cash flow, share count, ROIC) has not been steady, so the Moat part of the Wheel Score contributes little.

Returns on capital are thin or negative - ROIC 0.5%, ROE 1.2%, ROA 0.5% - with debt at 1.28 times equity and a free-cash-flow yield of 23.9%.

DLH Holdings Corp. pays no dividend, so the DDM model does not apply and a covered-call holder earns only the premium and any price gain. Revenue comes mainly from Fixed Price Contract 50%, Cost Reimbursable Contract 33%, Time and Materials Contract 17% (quarter Q3 FY2026).

Institutional ownership scores 8/10, insider activity 7/10 and Congressional trading 5/10 on the GLS smart-money scales; the last recorded insider buy was on 28 Sep 2026.

Wheel Score 45: Weak

With a Wheel Score of 45 DLH Holdings Corp. sits in the Weak band, capped at 45 because the engine files it as Speculative / Distressed. The parts - Value 25/25, Health 7/20, Moat 3/15, Premium 10/20, Stability 5/20 - show where: Moat (3/15) scores lowest.

Implied volatility is 101% on the near-the-money contracts 20-60 days out - above the 60% ceiling of the sweet spot. Premiums are large, but the Wheel Score tapers the Premium points (10 of 20) because volatility this high usually comes with a reason. Chain open interest is thin - 417 contracts across every expiry - so fills at a fair price are not guaranteed; a 30-45-day put may not exist at a usable strike.

Volume runs at 2k shares a day on a market cap of $58M, with a beta of 1.52 - a high beta, so the stock tends to move more than the market and a strike can be gapped through; the Stability part of the Wheel Score gives that 5 of 20.

The Wheel Score ranks ~7,400 US stocks for selling cash-secured puts and covered calls; it is updated nightly and is not a recommendation. The walkthrough lesson shows how the score fits into a trade, start to finish.

Upcoming events

The next earnings report is due on 9 Dec 2026, 54 days away - outside the window of a 30-45-day put sold today.

Earnings, dividend, IPO, split and economic calendars for the whole market, filterable to your watchlists.

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