ATRO
Astronics Corporation
$75.93
Cyclical & Capital-Intensive
80%
Normalized Earnings × Cycle Multiple
Strong
·
Conviction
Overvalued
Trading 326.1% above fair value
You pay
$75.93
Bear
$14.58
Fair
$17.82
Bull
$21.06
Bear
$14.58
-80.8%
$0.81 × 18x
Fair
$17.82
-76.5%
$0.81 × 22x
Bull
$21.06
-72.3%
$0.81 × 26x
Adjust Assumptions
22.0x
0.81$
Key Value Driver
Through-cycle normalized EPS ($0.81)
Implied Market Multiple
93.7x
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (14 analysts)
$83.50
Divergence from AlphaVal
79%
Summary
Using 7-year normalized EPS of $0.81 at a 22x cycle multiple, the base-case value is $17.82 per share. P/TBV cross-check: 133.9x.
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.
Price-to-book value of 133.9x 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 $83.50 (from 14 analysts). Our estimate is 79% 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