CNXN
PC Connection, Inc.
$74.73
Stable Earnings Power
65%
P/Adj-EPS × Normalized Multiple
Strong
·
Conviction
Overvalued
Trading 52.2% above fair value
You pay
$74.73
Bear
$39.27
Fair
$49.09
Bull
$58.91
Bear
$39.27
-47.4%
$3.27 × 12x P/E
Fair
$49.09
-34.3%
$3.27 × 15x P/E
Bull
$58.91
-21.2%
$3.27 × 18x P/E
Key Value Driver
Normalized P/E multiple (15x base case)
Implied Market Multiple
22.8x
Summary
Applying a 15x P/E to adjusted EPS of $3.27, the base-case value is $49.09 per share.
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