AVAV
AeroVironment, Inc.
$186.73
Distressed or Transitioning
75%
Current EPS × Depressed Multiple
Strong
·
Conviction
Overvalued
Trading 192.8% above fair value
You pay
$186.73
Bear
$42.51
Fair
$63.77
Bull
$85.02
Bear
$42.51
-77.2%
EPS continues to decline, 5x multiple
Fair
$63.77
-65.9%
Current EPS stabilizes, 8x multiple
Bull
$85.02
-54.5%
Credible recovery, multiple re-rates to 10x
Key Value Driver
Whether the core business model is intact or structurally impaired
Implied Market Multiple
108.6x
Summary
Our base-case estimate uses Current EPS × Depressed Multiple. We then blend that result with the average analyst price target of $216.36 from 28 analysts, using a 25% weight on analyst consensus. That produces an estimated intrinsic value of $63.77 per share.
Warnings
Don't assume past cash flow levels will return — the company's troubles may have permanently reduced its ability to generate profits.
A stock can look cheap on paper and still lose half its value if the underlying business is permanently damaged.
The wide range between our best and worst cases is intentional — pretending to know a precise value for a troubled company would be misleading.
Wall Street's average price target is $216.36 (from 28 analysts). Our estimate is 94% below the consensus -- consider that gap carefully.
Key Risks
- Bullish DCF projections are fundamentally unknowable for distressed companies
- M&A speculation can floor the stock above intrinsic value temporarily
- Management credibility is a key input — new CEO expands the bull case