GTT
GTT Communications, Inc.
$2.36
Stable Earnings Power
40%
P/Adj-EPS × Normalized Multiple
Strong
·
Conviction
Undervalued
Trading 81.2% below fair value
You pay
$2.36
Bear
$10.02
Fair
$12.52
Bull
$15.03
Bear
$10.02
+324.5%
$0.56 × 18x P/E
Fair
$12.52
+430.6%
$0.56 × 22x P/E
Bull
$15.03
+536.7%
$0.56 × 27x P/E
Key Value Driver
Normalized P/E multiple (22x base case)
Implied Market Multiple
4.2x
Summary
Applying a 22x P/E to adjusted EPS of $0.56, the base-case value is $12.52 per share.
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