HLIT
Harmonic Inc.
$15.20
Stable Earnings Power
40%
P/Adj-EPS × Normalized Multiple
Strong
·
Conviction
Overvalued
Trading 53.1% above fair value
You pay
$15.20
Bear
$7.94
Fair
$9.93
Bull
$11.91
Bear
$7.94
-47.8%
$0.35 × 18x P/E
Fair
$9.93
-34.7%
$0.35 × 22x P/E
Bull
$11.91
-21.7%
$0.35 × 27x P/E
Key Value Driver
Normalized P/E multiple (22x base case)
Implied Market Multiple
42.8x
Summary
Our base-case estimate uses a valuation based on adjusted earnings per share and a normalized price-to-earnings multiple. We then blend that result with the average analyst price target of $15.75 from 19 analysts, using a 25% weight on analyst consensus. That produces an estimated intrinsic value of $9.93 per share.
Warnings
Wall Street's average price target is $15.75 (from 19 analysts). Our estimate is 49% below the consensus -- consider that gap carefully.
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