GRC
The Gorman-Rupp Company
$73.04
Stable Earnings Power
65%
P/Adj-EPS × Normalized Multiple
Strong
·
Conviction
Overvalued
Trading 82.9% above fair value
You pay
$73.04
Bear
$31.94
Fair
$39.93
Bull
$47.91
Bear
$31.94
-56.3%
$2.02 × 16x P/E
Fair
$39.93
-45.3%
$2.02 × 20x P/E
Bull
$47.91
-34.4%
$2.02 × 24x P/E
Adjust Assumptions
19.8x
2.02$
Key Value Driver
Normalized P/E multiple (20x base case)
Implied Market Multiple
36.2x
Summary
Applying a 20x P/E to adjusted EPS of $2.02, the base-case value is $39.93 per share. DDM cross-check: $13.51.
Warnings
Dividend-based valuation: $13.51 (below our primary estimate by 66%). 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