GHC
Graham Holdings Company
$1,104.69
Stable Earnings Power
80%
P/Adj-EPS × Normalized Multiple
Mild
·
Conviction
Fair Value
Trading 11.8% below fair value
You pay
$1,104.69
Bear
$1,031.82
Fair
$1,252.92
Bull
$1,474.03
Bear
$1,031.82
-6.6%
$69.13 × 15x P/E
Fair
$1,252.92
+13.4%
$69.13 × 18x P/E
Bull
$1,474.03
+33.4%
$69.13 × 21x P/E
Key Value Driver
Normalized P/E multiple (18x base case)
Implied Market Multiple
16.0x
Summary
Applying a 18x P/E to adjusted EPS of $69.13, the base-case value is $1252.92 per share. DDM cross-check: $173.01.
Warnings
Dividend-based valuation: $173.01 (below our primary estimate by 86%). Large gaps may signal the dividend doesn't reflect full earning power.
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