CVLG
Covenant Logistics Group, Inc.
$35.63
Cyclical & Capital-Intensive
80%
Normalized Earnings × Cycle Multiple
Strong
·
Conviction
Overvalued
Trading 257.9% above fair value
You pay
$35.63
Bear
$7.24
Fair
$9.96
Bull
$12.67
Bear
$7.24
-79.7%
$1.81 × 4x
Fair
$9.96
-72.1%
$1.81 × 6x
Bull
$12.67
-64.4%
$1.81 × 7x
Adjust Assumptions
5.5x
1.81$
Key Value Driver
Through-cycle normalized EPS ($1.81)
Implied Market Multiple
19.7x
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (9 analysts)
$54.67
Divergence from AlphaVal
82%
Summary
Using 7-year normalized EPS of $1.81 at a 6x cycle multiple, the base-case value is $9.96 per share. P/TBV cross-check: 4.1x.
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 4.1x 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 $54.67 (from 9 analysts). Our estimate is 82% 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