EXPO
Exponent, Inc.
$69.81
Cyclical & Capital-Intensive
80%
Normalized Earnings × Cycle Multiple
Strong
·
Conviction
Overvalued
Trading 97.9% above fair value
You pay
$69.81
Bear
$27.44
Fair
$35.28
Bull
$43.12
Bear
$27.44
-60.7%
$1.96 × 14x
Fair
$35.28
-49.5%
$1.96 × 18x
Bull
$43.12
-38.2%
$1.96 × 22x
Adjust Assumptions
18.0x
1.96$
Key Value Driver
Through-cycle normalized EPS ($1.96)
Implied Market Multiple
35.6x
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (8 analysts)
$72.00
Divergence from AlphaVal
51%
Summary
Using 7-year normalized EPS of $1.96 at a 18x cycle multiple, the base-case value is $35.28 per share. P/TBV cross-check: 8.9x.
Warnings
Price-to-book value of 8.9x 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 $72.00 (from 8 analysts). Our estimate is 51% 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