APG
APi Group Corporation
$40.83
Cyclical & Capital-Intensive
80%
Normalized Earnings × Cycle Multiple
Strong
·
Conviction
Overvalued
Trading 183.1% above fair value
You pay
$40.83
Bear
$10.57
Fair
$14.42
Bull
$18.24
Bear
$10.57
-74.1%
$0.31 × 14x + net cash
Fair
$14.42
-64.7%
$0.31 × 18x + net cash
Bull
$18.24
-55.3%
$0.31 × 22x + net cash
Key Value Driver
Through-cycle normalized EPS ($0.31)
Implied Market Multiple
133.0x
Summary
Our base-case estimate uses Normalized Earnings × Cycle Multiple. We then blend that result with the average analyst price target of $53.67 from 8 analysts, using a 20% weight on analyst consensus. That produces an estimated intrinsic value of $14.42 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 $53.67 (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