CNXN
PC Connection, Inc.
$86.60
Stable Earnings Power
65%
P/Adj-EPS × Normalized Multiple
Strong
·
Conviction
Overvalued
Trading 76.6% above fair value
You pay
$86.60
Bear
$39.24
Fair
$49.05
Bull
$58.86
Bear
$39.24
-54.7%
$3.27 × 12x P/E
Fair
$49.05
-43.4%
$3.27 × 15x P/E
Bull
$58.86
-32.0%
$3.27 × 18x P/E
Adjust Assumptions
15.0x
3.27$
Key Value Driver
Normalized P/E multiple (15x base case)
Implied Market Multiple
26.5x
Summary
Applying a 15x P/E to adjusted EPS of $3.27, the base-case value is $49.05 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