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ZYBERNO

Stock Report

Updated Sep 1, 2026

NATURAL ALTERNATIVES INTERNATIONAL INC (NAII)

Healthcare • NASDAQ

$2.13

Professional Investment Analysis

ZYBERNO SCORE →

Is it a great business? Is it getting better?

22.0/100

POOR BUSINESS

NATURAL ALTERNATIVES INTERNATIONAL INC (NAII) scores 22/100 — concerning metrics indicating significant structural or financial risks.

📊 How is the Zyberno Score calculated? +

The Zyberno Score answers one question: "Is this a quality business worth owning?" It's a 0-100 investment grade that evaluates business fundamentals across four critical dimensions, based on principles from Warren Buffett, Benjamin Graham, Peter Lynch, and Charlie Munger.

The 4 Core Categories (25 points each):

1. PROFITABILITY (25 pts)

Metrics: ROE, ROIC, Net Margin, Operating Margin
Thresholds: ROE >20% excellent • ROIC >20% excellent • Net Margin >20% excellent • Operating Margin >25% excellent

2. FINANCIAL STRENGTH (25 pts)

Metrics: Debt-to-Equity, Current Ratio, Interest Coverage, Altman Z-Score
Thresholds: D/E <0.3 excellent • Current Ratio >2.5 excellent • Interest Coverage >10x excellent • Altman Z >3.0 safe

3. CASH FLOW QUALITY (25 pts)

Metrics: Free Cash Flow, OCF vs Net Income, FCF Margin
Thresholds: Positive & growing FCF excellent • OCF/NI >1.2x excellent (cash earnings exceed accounting)

4. GROWTH & CONSISTENCY (25 pts)

Metrics: Revenue Growth, Net Income Growth, FCF Growth, Piotroski F-Score
Thresholds: Growth via log-linear regression • Piotroski 8-9 excellent, 6-7 good

Score Interpretation:

75-100

GREAT BUSINESS

65-74

GOOD BUSINESS

50-64

AVERAGE BUSINESS

30-49

WEAK BUSINESS

0-29

POOR BUSINESS

→ View full NAII quality analysis & detailed breakdown

VALUATION SIGNAL

MARGIN OF SAFETY

Is this stock cheap or expensive relative to what the business has historically generated for owners?

-97.4%

Overvalued

Growth gap unavailable — insufficient data for reverse DCF calculation.

🎯 Expected Annual Return →

-27.6%

Margin of Safety convergence — your return if the market re-prices to intrinsic value (5-yr annualised)

9.7%

Yield + growth — what the business alone earns you, even if the market never re-rates

💰 How is Margin of Safety calculated? +

Margin of Safety measures how much discount or premium you're paying relative to a stock's intrinsic value. It's Benjamin Graham's core principle: the larger the margin, the lower your downside risk.

Formula: (Intrinsic Value − Current Price) ÷ Intrinsic Value × 100%

How We Calculate Intrinsic Value (DCF Method):

Step 1: Calculate current Owner Earnings (OCF − Maintenance CapEx)

Step 2: Calculate company-specific growth rate using log-linear regression on 16 quarters of Owner Earnings

Step 3: Project 10 years forward using the calculated growth rate

Step 4: Discount each year's cash flow to present value using 10% discount rate

Step 5: Calculate terminal value using 3% perpetual growth rate

Step 6: Sum all discounted cash flows = Intrinsic Value

What The Percentages Mean:

+50% or more

EXCELLENT — Very undervalued

+25% to +50%

GOOD — Attractive discount

0% to +25%

FAIR — Reasonable value

0% to -25%

CAUTION — Slight premium

-25% or worse

POOR — Overvalued

"Price is what you pay, value is what you get." — Warren Buffett

→ View full NAII valuation analysis · → View full NAII Brina Gap analysis

📈 How is Brina Gap calculated? +

Brina Gap measures the difference between the growth a business can fundamentally sustain and the growth the market is already pricing in.

Formula: Fundamental Growth Rate − Market-Implied Growth Rate

The Two Components:

Fundamental Growth Rate = ROIC × Reinvestment Rate

What the business can sustainably grow at based on how much it reinvests and what return it earns on that capital. Grounded in historical financials.

Market-Implied Growth Rate = Reverse DCF

The growth rate the current Enterprise Value implicitly assumes. Calculated by back-solving a 10-year DCF model (10% WACC, 3% terminal growth) until the present value of projected cash flows equals EV.

What The Gap Means:

Gap > +5% Market Underestimates — potential upside

+2% to +5% Slight Underestimate

-2% to +2% Fairly Priced — market consensus matches fundamentals

-5% to -2% Slight Overestimate

Gap < -5% Market Overestimates — price embeds optimism fundamentals don't support

A positive gap (market underestimates) combined with a positive Margin of Safety is the strongest combined signal — the business is both cheap historically and forward economics are stronger than the price suggests.

Critical Financial Health Indicators

Return on Equity (Profitability):CRITICAL (-21.5%)

Debt-to-Equity (Solvency Risk):POOR (1.48x)

Operating Margin (Operational Efficiency):CRITICAL (-5.3%)

Return on Capital (Capital Efficiency):CRITICAL (-5.6%)

📊 Valuation Trilogy

Three interconnected metrics for complete valuation analysis

Click any metric for full methodology and detailed analysis

Zyberno's Verdict

NATURAL ALTERNATIVES INTERNATIONAL INC (NAII) stock report — Zyberno Score 22/100 (POOR BUSINESS), Margin of Safety -97.4%, -28% expected annual return. Full financial analysis on Zyberno.

According to Zyberno's DCF model, NATURAL ALTERNATIVES INTERNATIONAL INC (NAII) trades at $2.13 against an estimated intrinsic value per share of $1.08 — a -97.4% Margin of Safety based on Owner Earnings of $1.30M TTM, projected at -17.8% growth for 10 years with a 2.5% terminal growth rate. Zyberno's model translates this into a 5-year expected return of -27.6% annually.

Over the trailing twelve months, NAII generated $1.30M in Owner Earnings. Capital was deployed as follows: $5.00K returned via share buybacks, $4.34M invested in capital expenditures. Reinvestment rate: 16.8%. Owner Earnings have declined at 17.8% annually over the trailing five years using log-linear regression.

DIVISION I: EXECUTIVE SUMMARY

A. Market Valuation

Market Price & Capitalization (2)

Current Price:2.13

Market Cap:$12.83M

Valuation Multiples (3)

P/B Ratio:0.20x

P/S Ratio:0.09x

Peg Ratio:-999.00x

Enterprise Metrics (2)

Enterprise Value:$50.10M

Pfcf Ratio:12.18x

Price Action & Momentum (3)

12-1 Momentum:

-42.4% (18th pctile)

📈 Click to view full NAII Momentum analysis →

Momentum Percentile:18 / 100

% of 52-Week High:42.9%

B. Profitability Assessment

Return Metrics (5)

ROE:

-21.5%

📊 Click to view full NAII ROE analysis →

ROA:-9.3%

Roic:

-5.6%

📊 Click to view full NAII ROIC analysis →

Reinvestment Rate:16.8%

Fundamental Growth Rate (g):-0.9%

Margin Analysis (3)

Operating Margin Ttm:-5.3%

Net Margin Ttm:-10.1%

Ebitda Margin:-2.0%

TTM Performance (3)

Gross Margin Ttm:7.6%

Operating Margin Ttm:-5.3%

Net Margin Ttm:-10.1%

Yield Metrics (3)

Earnings Yield:-$117.65

Owner Earnings Yield:$10.61

Dividend Yield:0.0%

C. Log-Linear Regression Growth Trends

Earnings Surprise (SUE) (3)

Earnings Surprise (SUE):

-0.72

📊 Click to view full NAII Earnings Surprise analysis →

EPS Surprise vs Expected:-160.9%

Latest Earnings Filed:2026-05-19

Revenue Growth (Linear) (1)

Revenue Growth Rate (Linear):-12.0%

Earnings Growth (Linear) (1)

Net Income Growth Rate (Linear):-30.6%

Cash Flow Growth (Linear) (2)

Free Cash Flow Growth Rate (Linear):-5.2%

Operating Cash Flow Growth Rate (Linear):-40.2%

Operating Growth (Linear) (1)

Operating Income Growth Rate (Linear):-50.0%

D. Financial Stability

Liquidity Ratios (3)

Current Ratio:1.64x

Quick Ratio:0.87x

Cash Ratio:0.24x

Leverage Analysis (3)

Debt To Equity Ttm:1.48x

Debt-to-Equity Ratio:1.48x

Debt To Ebitda:-999.00x

Coverage Ratios (1)

Times Interest Earned:-999.00

Capital Structure (4)

Working Capital:24,870,000.00

Cash And Cash Equivalents:9,196,000.00

Long Term Debt:$44.10M

Net Debt:$37.27M

DIVISION II: FINANCIAL STATEMENTS ANALYSIS

A. Income Statement Analysis

Revenue Components (2)

Revenue TTM: $141.87M

Linear Growth: -12.0%

📊 Click to view full NAII Revenue analysis & methodology →

Cost Of Revenue Ttm:$131.07M

Profitability Breakdown (2)

Gross profit TTM: $10.81M

Linear Growth: -30.5%

📊 Click to view full NAII Gross Profit analysis & methodology →

Operating income TTM: -$7.52M

Linear Growth: -50.0%

📊 Click to view full NAII Operating Income analysis & methodology →

Bottom Line Performance (3)

Net income TTM: -$14.37M

Linear Growth: -30.6%

📊 Click to view full NAII Net Income analysis & methodology →

Income Before Tax:-$9.59M

Ebitda Ttm:-2,835,000.00

Operating Expenses (5)

Operating Expenses:0.00

R And D Expense:1,800,000.00

Sga Expense:16,774,000.00

Income Tax Expense:$5.10M

Interest Expense:-933,000.00

Expense Ratios (3)

R And D To Revenue Percentage:5.1%

Sga To Revenue Percentage:47.3%

Ebitda Margin:-2.0%

B. Balance Sheet Analysis

Asset Composition (5)

Total Assets:$154.88M

Current Assets:$64.00M

Ppe Net:50,813,000.00

Goodwill:0.00

Intangible Assets:$0.00

Liability Structure (4)

Total Liabilities:91,770,000.00

Current Liabilities:39,125,000.00

Long Term Debt:$44.10M

Short Term Debt:$2.36M

Equity & Capital (3)

Equity:$63.11M

Retained Earnings:$52.24M

Common Stock:20,000,000.00

Working Capital Items (3)

Accounts Receivable:20,588,000.00

Inventory:29,934,000.00

Accounts Payable:18,156,000.00

Special Items (2)

Contract Liabilities:1,323,000.00

Stock Based Compensation:140,000.00

C. Cash Flow Analysis

Operating Activities (2)

Operating cash flow TTM: $5.35M

Linear Growth: -40.2%

Free cash flow TTM: $1.01M

Linear Growth: -5.2%

📊 Click to view full NAII Free Cash Flow analysis & methodology →

Investment Activities (2)

Investing Cash Flow:-$1.03M

Capital Expenditures Ttm:4,343,000.00

Financing Activities (3)

Financing Cash Flow:$472.00K

Dividends Paid Ttm:0.00

Stock Repurchase:5,000.00

Capital Transactions (3)

Common Stock Issuance:0.00

Long Term Debt Issuance:$0.00

Long Term Debt Repayments:$74.00K

Non-Cash Items (1)

Depreciation Amortization Ttm:4,686,000.00

DIVISION III: OPERATIONAL METRICS

A. Per Share Analysis

Earnings Per Share (3)

EPS (Basic TTM):-2.40

Eps diluted TTM: -$2.40

Linear Growth: -26.9%

📊 Click to view full NAII EPS analysis & methodology →

Earnings Per Share Ttm:-$2.39

Revenue & Cash Per Share (3)

Sales Per Share Ttm:23.55

Operating Cash Flow Per Share:$0.98

Fcf Per Share Ttm:0.17

Book Value & Capital (2)

Book Value Per Share:$10.47

Cash Per Share:1.53

Dividend Policy (1)

Dividend Payout Ratio:-999.00x

B. Operational Efficiency

Asset Utilization (2)

Asset Turnover Ttm:0.92x

Working Capital Turnover Ttm:5.70x

Receivables Management (2)

Receivables Turnover Ttm:6.89x

Days Sales Outstanding Ttm:52.97

Inventory Management (2)

Inventory Turnover Ttm:4.38x

Days Inventory Outstanding Ttm:83.36

Payables & Cash Cycle (2)

Days Payable Outstanding:50.56

Cash Conversion Cycle:85.77

C. Quality & Risk Metrics

Financial Quality Scores (2)

Financial Strength Score:60.00

Quality Score:40.00

Market Metrics (2)

Beta:0.00x

Volatility Category:unknown

DIVISION IV: INVESTMENT ANALYSIS

A. Value Investment Framework

Owner Earnings Analysis (3)

Owner earnings TTM: $1.30M

Linear Growth: -17.8%

📊 Click to view full NAII Owner Earnings analysis & methodology →

Owner Earnings Per Share:$0.22

Owner Earnings Yield:$10.61

Growth Assessment (1)

Owner Earnings Growth Rate:-$17.80

Damodaran Growth Analysis (2)

Reinvestment Rate:16.8%

Fundamental Growth Rate (g):-0.9%

Intrinsic Value Models (1)

Intrinsic Value:

$6.50M

📊 Click to view full NAII DCF valuation →

Margin of Safety (1)

Margin Of Safety:

-97.4%

📊 Click to view full NAII valuation analysis →

Return Scenarios (2)

Theoretical 5-Year Return:

-27.6%

📊 Click to view full NAII expected return analysis →

Forward Expected Return (Yield + Growth):

9.7%

📊 Click to view full NAII expected return analysis →

Investment Assessment (1)

Buffett Assessment:Overvalued

B. Log-Linear Regression Growth Analysis

Growth Rates (Log-Linear Regression) (3)

Revenue Growth Rate (Linear):-12.0%

Net Income Growth Rate (Linear):-30.6%

Operating Income Growth Rate (Linear):-50.0%

Cash Flow Growth Rates (2)

Free Cash Flow Growth Rate (Linear):-5.2%

Operating Cash Flow Growth Rate (Linear):-40.2%

Other Growth Rates (3)

Gross Profit Growth Rate (Linear):-30.5%

Book Value Growth Rate (Linear):-1.9%

Owner Earnings Growth Rate:-$17.80

C. Company Profile & Context

Corporate Information (6)

Symbol:NAII

Company Name:NATURAL ALTERNATIVES INTERNATIONAL INC

Sector:Healthcare

Industry:Pharmaceuticals

Exchange:NASDAQ

Country:United States

Market Classification (3)

Market Cap Category:N/A

Price Category:low

Volume Category:N/A

Share Structure (3)

Shares Outstanding:6.03M

Shares Outstanding Basic:6.03M

Shares Outstanding Diluted:6.03M

Data Processing Info (3)

Processing Version:v3.0

Last Updated:2026-09-01 13:40:02 UTC

Data Timestamp:2026-08-21T09:18:48.234642