AMKR
Amkor Technology, Inc.
$70.47
Cyclical & Capital-Intensive
80%
Normalized Earnings × Cycle Multiple
Strong
·
Conviction
Overvalued
Trading 84.9% above fair value
You pay
$70.47
Bear
$29.15
Fair
$38.10
Bull
$47.06
Bear
$29.15
-58.6%
$1.68 × 12x + net cash
Fair
$38.10
-45.9%
$1.68 × 16x + net cash
Bull
$47.06
-33.2%
$1.68 × 20x + net cash
Key Value Driver
Through-cycle normalized EPS ($1.68)
Implied Market Multiple
41.9x
Summary
Our base-case estimate uses Normalized Earnings × Cycle Multiple. We then blend that result with the average analyst price target of $76.00 from 14 analysts, using a 20% weight on analyst consensus. That produces an estimated intrinsic value of $38.10 per share.
Warnings
Price-to-book value of 3.9x 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 $76.00 (from 14 analysts). Our estimate is 62% 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