HIL
Hill International, Inc.
$3.40
Cyclical & Capital-Intensive
80%
Normalized Earnings × Cycle Multiple
Strong
·
Conviction
Undervalued
Trading 49.3% below fair value
You pay
$3.40
Bear
$5.23
Fair
$6.70
Bull
$8.18
Bear
$5.23
+53.9%
$0.37 × 14x + net cash
Fair
$6.70
+97.2%
$0.37 × 18x + net cash
Bull
$8.18
+140.5%
$0.37 × 22x + net cash
Key Value Driver
Through-cycle normalized EPS ($0.37)
Implied Market Multiple
9.2x
Summary
Using 7-year normalized EPS of $0.37 at a 18x cycle multiple, the base-case value is $6.70 per share. P/TBV cross-check: 2.0x.
Key Risks
- Standard 10-year DCF produces unreliable terminal values for cyclicals
- 'Cheap' P/E at cycle peak is the most common value trap — normalize first
- Captive finance subsidiaries have different risk profiles from manufacturing