DY
Dycom Industries, Inc.
$410.18
Cyclical & Capital-Intensive
80%
Normalized Earnings × Cycle Multiple
Strong
·
Conviction
Overvalued
Trading 70.6% above fair value
You pay
$410.18
Bear
$176.28
Fair
$240.38
Bull
$304.48
Bear
$176.28
-57.0%
$7.37 × 14x + net cash
Fair
$240.38
-41.4%
$7.37 × 18x + net cash
Bull
$304.48
-25.8%
$7.37 × 22x + net cash
Key Value Driver
Through-cycle normalized EPS ($7.37)
Implied Market Multiple
55.7x
Summary
Our base-case estimate uses Normalized Earnings × Cycle Multiple. We then blend that result with the average analyst price target of $629.86 from 22 analysts, using a 25% weight on analyst consensus. That produces an estimated intrinsic value of $240.38 per share.
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.
Wall Street's average price target is $629.86 (from 22 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