ADEA
Adeia Inc.
$26.21
Stable Earnings Power
40%
P/Adj-EPS × Normalized Multiple
Mild
·
Conviction
Fair Value
Trading 8.4% below fair value
You pay
$26.21
Bear
$23.96
Fair
$28.63
Bull
$33.28
Bear
$23.96
-8.6%
$1.21 × 18x P/E
Fair
$28.63
+9.2%
$1.21 × 22x P/E
Bull
$33.28
+27.0%
$1.21 × 25x P/E
Key Value Driver
Normalized P/E multiple (22x base case)
Implied Market Multiple
21.7x
Summary
Our base-case estimate uses a valuation based on adjusted earnings per share and a normalized price-to-earnings multiple. We then blend that result with the average analyst price target of $39.33 from 5 analysts, using a 20% weight on analyst consensus. That produces an estimated intrinsic value of $28.63 per share.
Warnings
Wall Street's average price target is $39.33 (from 5 analysts). Our estimate is 34% below the consensus -- consider that gap carefully.
Key Risks
- Growth DCF inappropriate — terminal value assumptions dominate
- EV/EBITDA misleading for regulated businesses where capex is mandated
- Regulatory risk is a fat tail not visible in normal multiples