APG
APi Group Corporation
$41.63
Cyclical & Capital-Intensive
80%
Normalized Earnings × Cycle Multiple
Strong
·
Conviction
Overvalued
Trading 193.4% above fair value
You pay
$41.63
Bear
$10.40
Fair
$14.19
Bull
$17.94
Bear
$10.40
-75.0%
$0.31 × 14x + net cash
Fair
$14.19
-65.9%
$0.31 × 18x + net cash
Bull
$17.94
-56.9%
$0.31 × 22x + net cash
Key Value Driver
Through-cycle normalized EPS ($0.31)
Implied Market Multiple
135.6x
Summary
Our base-case estimate uses Normalized Earnings × Cycle Multiple. We then blend that result with the average analyst price target of $52.50 from 8 analysts, using a 20% weight on analyst consensus. That produces an estimated intrinsic value of $14.19 per share.
Warnings
This company has a built-in lending arm whose debt is mixed in with the main business. We capped the debt adjustment to avoid overstating what the core business owes.
Wall Street's average price target is $52.50 (from 8 analysts). Our estimate is 91% 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