CDRE
Cadre Holdings, Inc.
$26.38
Cyclical & Capital-Intensive
80%
Normalized Earnings × Cycle Multiple
Moderate
·
Conviction
Overvalued
Trading 33.2% above fair value
You pay
$26.38
Bear
$16.20
Fair
$19.80
Bull
$23.40
Bear
$16.20
-38.6%
$0.90 × 18x
Fair
$19.80
-24.9%
$0.90 × 22x
Bull
$23.40
-11.3%
$0.90 × 26x
Adjust Assumptions
22.0x
0.9$
Key Value Driver
Through-cycle normalized EPS ($0.90)
Implied Market Multiple
29.3x
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (11 analysts)
$42.00
Divergence from AlphaVal
53%
Summary
Using 7-year normalized EPS of $0.90 at a 22x cycle multiple, the base-case value is $19.80 per share. P/TBV cross-check: 52.8x.
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 52.8x 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 $42.00 (from 11 analysts). Our estimate is 53% 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