CASS
Cass Information Systems, Inc.
$45.62
Stable Earnings Power
65%
P/Adj-EPS × Normalized Multiple
Mild
·
Conviction
Overvalued
Trading 11.2% above fair value
You pay
$45.62
Bear
$32.81
Fair
$41.01
Bull
$49.21
Bear
$32.81
-28.1%
$2.73 × 12x P/E
Fair
$41.01
-10.1%
$2.73 × 15x P/E
Bull
$49.21
+7.9%
$2.73 × 18x P/E
Key Value Driver
Normalized P/E multiple (15x base case)
Implied Market Multiple
16.7x
Summary
Applying a 15x P/E to adjusted EPS of $2.73, the base-case value is $41.01 per share. DDM cross-check: $24.76.
Warnings
Dividend-based valuation: $24.76 (below our primary estimate by 40%). 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