GRC
The Gorman-Rupp Company
$79.50
Stable Earnings Power
65%
P/Adj-EPS × Normalized Multiple
Strong
·
Conviction
Overvalued
Trading 52.6% above fair value
You pay
$79.50
Bear
$41.67
Fair
$52.09
Bull
$62.51
Bear
$41.67
-47.6%
$2.64 × 16x P/E
Fair
$52.09
-34.5%
$2.64 × 20x P/E
Bull
$62.51
-21.4%
$2.64 × 24x P/E
Key Value Driver
Normalized P/E multiple (20x base case)
Implied Market Multiple
30.2x
Summary
Applying a 20x P/E to adjusted EPS of $2.64, the base-case value is $52.09 per share. DDM cross-check: $14.26.
Warnings
The company's reported profits differ from official accounting profits by 30%. Check what costs are being left out of the adjusted number.
Dividend-based valuation: $14.26 (below our primary estimate by 73%). 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