AOSL
Alpha and Omega Semiconductor Limited
$34.69
Cyclical & Capital-Intensive
80%
Normalized Earnings × Cycle Multiple
Moderate
·
Conviction
Overvalued
Trading 30.2% above fair value
You pay
$34.69
Bear
$21.07
Fair
$26.64
Bull
$32.21
Bear
$21.07
-39.3%
$1.09 × 12x + net cash
Fair
$26.64
-23.2%
$1.09 × 16x + net cash
Bull
$32.21
-7.1%
$1.09 × 20x + net cash
Key Value Driver
Through-cycle normalized EPS ($1.09)
Implied Market Multiple
31.9x
Summary
Our base-case estimate uses Normalized Earnings × Cycle Multiple. We then blend that result with the average analyst price target of $50.00 from 11 analysts, using a 20% weight on analyst consensus. That produces an estimated intrinsic value of $26.64 per share.
Warnings
Wall Street's average price target is $50.00 (from 11 analysts). Our estimate is 58% 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