CASS
Cass Information Systems, Inc.
$55.57
Stable Earnings Power
65%
P/Adj-EPS × Normalized Multiple
Strong
·
Conviction
Overvalued
Trading 42.0% above fair value
You pay
$55.57
Bear
$31.32
Fair
$39.15
Bull
$46.98
Bear
$31.32
-43.6%
$2.61 × 12x P/E
Fair
$39.15
-29.6%
$2.61 × 15x P/E
Bull
$46.98
-15.5%
$2.61 × 18x P/E
Adjust Assumptions
15.0x
2.61$
Key Value Driver
Normalized P/E multiple (15x base case)
Implied Market Multiple
21.3x
Summary
Applying a 15x P/E to adjusted EPS of $2.61, the base-case value is $39.15 per share. DDM cross-check: $25.92.
Warnings
Dividend-based valuation: $25.92 (below our primary estimate by 34%). Large gaps may signal the dividend doesn't reflect full earning power.
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