AOSL
Alpha and Omega Semiconductor Limited
$41.72
Cyclical & Capital-Intensive
80%
Normalized Earnings × Cycle Multiple
Strong
·
Conviction
Overvalued
Trading 65.3% above fair value
You pay
$41.72
Bear
$19.96
Fair
$25.24
Bull
$30.52
Bear
$19.96
-52.2%
$1.09 × 12x + net cash
Fair
$25.24
-39.5%
$1.09 × 16x + net cash
Bull
$30.52
-26.8%
$1.09 × 20x + net cash
Key Value Driver
Through-cycle normalized EPS ($1.09)
Implied Market Multiple
38.4x
Summary
Our base-case estimate uses Normalized Earnings × Cycle Multiple. We then blend that result with the average analyst price target of $43.00 from 11 analysts, using a 20% weight on analyst consensus. That produces an estimated intrinsic value of $25.24 per share.
Warnings
Wall Street's average price target is $43.00 (from 11 analysts). Our estimate is 52% 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