BBW
Build-A-Bear Workshop, Inc.
$34.40
Stable Earnings Power
80%
P/Adj-EPS × Normalized Multiple
Strong
·
Conviction
Undervalued
Trading 58.5% below fair value
You pay
$34.40
Bear
$72.44
Fair
$82.79
Bull
$93.14
Bear
$72.44
+110.6%
$3.99 × 19x P/E
Fair
$82.79
+140.7%
$3.99 × 22x P/E
Bull
$93.14
+170.8%
$3.99 × 25x P/E
Key Value Driver
Normalized P/E multiple (22x base case)
Implied Market Multiple
8.6x
Summary
Our base-case estimate uses a valuation based on adjusted earnings per share and a normalized price-to-earnings multiple. We then blend that result with the average analyst price target of $60.00 from 11 analysts, using a 20% weight on analyst consensus. That produces an estimated intrinsic value of $82.79 per share.
Warnings
Wall Street's average price target is $60.00 (from 11 analysts). Our estimate is 47% above the consensus -- consider that gap carefully.
Key Risks
- Growth DCF inappropriate — terminal value assumptions dominate
- EV/EBITDA misleading for regulated businesses where capex is mandated
- Regulatory risk is a fat tail not visible in normal multiples