ACMR
ACM Research, Inc.
$73.35
Cyclical & Capital-Intensive
80%
Normalized Earnings × Cycle Multiple
Strong
·
Conviction
Overvalued
Trading 80.5% above fair value
You pay
$73.35
Bear
$34.76
Fair
$40.64
Bull
$46.52
Bear
$34.76
-52.6%
$1.16 × 12x + net cash
Fair
$40.64
-44.6%
$1.16 × 16x + net cash
Bull
$46.52
-36.6%
$1.16 × 20x + net cash
Key Value Driver
Through-cycle normalized EPS ($1.16)
Implied Market Multiple
63.2x
Summary
Our base-case estimate uses Normalized Earnings × Cycle Multiple. We then blend that result with the average analyst price target of $75.00 from 10 analysts, using a 20% weight on analyst consensus. That produces an estimated intrinsic value of $40.64 per share.
Warnings
Price-to-book value of 3.2x 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 $75.00 (from 10 analysts). Our estimate is 57% 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