GDS
GDS Holdings Limited
$35.02
Stable Earnings Power
50%
P/Adj-EPS × Normalized Multiple
Strong
·
Conviction
Overvalued
Trading 50.3% above fair value
You pay
$35.02
Bear
$18.65
Fair
$23.30
Bull
$27.97
Bear
$18.65
-46.8%
$0.64 × 16x P/E
Fair
$23.30
-33.5%
$0.64 × 20x P/E
Bull
$27.97
-20.1%
$0.64 × 24x P/E
Key Value Driver
Normalized P/E multiple (20x base case)
Implied Market Multiple
54.8x
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 $55.63 from 20 analysts, using a 25% weight on analyst consensus. That produces an estimated intrinsic value of $23.30 per share.
Warnings
Wall Street's average price target is $55.63 (from 20 analysts). Our estimate is 77% below the consensus -- consider that gap carefully.
Financial statements were converted from CNY into USD using USDCNY at 0.1472 USD per CNY.
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