DY
Dycom Industries, Inc.
$228.53
Cyclical & Capital-Intensive
80%
Normalized Earnings × Cycle Multiple
Strong
·
Conviction
Overvalued
Trading 72.3% above fair value
You pay
$228.53
Bear
$103.18
Fair
$132.66
Bull
$162.14
Bear
$103.18
-54.9%
$7.37 × 14x
Fair
$132.66
-42.0%
$7.37 × 18x
Bull
$162.14
-29.1%
$7.37 × 22x
Adjust Assumptions
18.0x
7.37$
Key Value Driver
Through-cycle normalized EPS ($7.37)
Implied Market Multiple
31.0x
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (22 analysts)
$507.86
Divergence from AlphaVal
74%
Summary
Using 7-year normalized EPS of $7.37 at a 18x cycle multiple, the base-case value is $132.66 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 $507.86 (from 22 analysts). Our estimate is 74% 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