ETD
Ethan Allen Interiors Inc.
$19.74
Stable Earnings Power
80%
P/Adj-EPS × Normalized Multiple
Moderate
·
Conviction
Undervalued
Trading 36.9% below fair value
You pay
$19.74
Bear
$27.36
Fair
$31.27
Bull
$35.18
Bear
$27.36
+38.6%
$2.07 × 14x P/E
Fair
$31.27
+58.4%
$2.07 × 16x P/E
Bull
$35.18
+78.2%
$2.07 × 18x P/E
Key Value Driver
Normalized P/E multiple (16x base case)
Implied Market Multiple
9.5x
Summary
Our base-case estimate uses a valuation based on adjusted earnings per share and a normalized price-to-earnings multiple. We then blend that result with the average analyst price target of $24.00 from 10 analysts, using a 20% weight on analyst consensus. That produces an estimated intrinsic value of $31.27 per share.
Warnings
The company pays out 90% of its profits as dividends. That leaves little cushion — the dividend could be cut if business slows down.
Wall Street's average price target is $24.00 (from 10 analysts). Our estimate is 38% above the consensus -- consider that gap carefully.
Key Risks
- Growth DCF inappropriate — terminal value assumptions dominate
- EV/EBITDA misleading for regulated businesses where capex is mandated
- Regulatory risk is a fat tail not visible in normal multiples