COHU
Cohu, Inc.
$46.53
Cyclical & Capital-Intensive
80%
Normalized Earnings × Cycle Multiple
Strong
·
Conviction
Overvalued
Trading 74.6% above fair value
You pay
$46.53
Bear
$20.83
Fair
$26.65
Bull
$32.47
Bear
$20.83
-55.2%
$1.14 × 12x + net cash
Fair
$26.65
-42.7%
$1.14 × 16x + net cash
Bull
$32.47
-30.2%
$1.14 × 20x + net cash
Key Value Driver
Through-cycle normalized EPS ($1.14)
Implied Market Multiple
40.8x
Summary
Our base-case estimate uses Normalized Earnings × Cycle Multiple. We then blend that result with the average analyst price target of $49.75 from 14 analysts, using a 20% weight on analyst consensus. That produces an estimated intrinsic value of $26.65 per share.
Warnings
Price-to-book value of 5.2x 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 $49.75 (from 14 analysts). Our estimate is 58% 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