ACMR
ACM Research, Inc.
$103.00
Cyclical & Capital-Intensive
80%
Normalized Earnings × Cycle Multiple
Strong
·
Conviction
Overvalued
Trading 116.2% above fair value
You pay
$103.00
Bear
$40.74
Fair
$47.64
Bull
$54.54
Bear
$40.74
-60.4%
$1.16 × 12x + net cash
Fair
$47.64
-53.7%
$1.16 × 16x + net cash
Bull
$54.54
-47.1%
$1.16 × 20x + net cash
Key Value Driver
Through-cycle normalized EPS ($1.16)
Implied Market Multiple
88.8x
Summary
Our base-case estimate uses Normalized Earnings × Cycle Multiple. We then blend that result with the average analyst price target of $110.00 from 10 analysts, using a 20% weight on analyst consensus. That produces an estimated intrinsic value of $47.64 per share.
Warnings
Price-to-book value of 4.5x is above the normal range for this type of business (0.7x-2.0x). The stock may already price in a strong cycle.
Wall Street's average price target is $110.00 (from 10 analysts). Our estimate is 71% below the consensus -- consider that gap carefully.
Key Risks
- Standard 10-year DCF produces unreliable terminal values for cyclicals
- 'Cheap' P/E at cycle peak is the most common value trap — normalize first
- Captive finance subsidiaries have different risk profiles from manufacturing