ECG
Everus Construction Group, Inc.
$148.65
Cyclical & Capital-Intensive
70%
Normalized Earnings × Cycle Multiple
Strong
·
Conviction
Overvalued
Trading 110.9% above fair value
You pay
$148.65
Bear
$55.21
Fair
$70.47
Bull
$85.73
Bear
$55.21
-62.9%
$2.69 × 14x + net cash
Fair
$70.47
-52.6%
$2.69 × 18x + net cash
Bull
$85.73
-42.3%
$2.69 × 22x + net cash
Key Value Driver
Through-cycle normalized EPS ($2.69)
Implied Market Multiple
55.3x
Summary
Our base-case estimate uses Normalized Earnings × Cycle Multiple. We then blend that result with the average analyst price target of $153.60 from 6 analysts, using a 20% weight on analyst consensus. That produces an estimated intrinsic value of $70.47 per share.
Warnings
Recent profits ($3.95/share) are 47% above the mid-cycle average ($2.69). Buying based on peak profits is the most common mistake with boom-and-bust businesses.
Price-to-book value of 15.6x 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 $153.60 (from 6 analysts). Our estimate is 68% 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