HRI
Herc Holdings Inc.
$129.85
Stable Earnings Power
40%
P/Adj-EPS × Normalized Multiple
Moderate
·
Conviction
Fair Value
Trading 22.0% below fair value
You pay
$129.85
Bear
$133.20
Fair
$166.50
Bull
$199.80
Bear
$133.20
+2.6%
$7.40 × 18x P/E
Fair
$166.50
+28.2%
$7.40 × 22x P/E
Bull
$199.80
+53.9%
$7.40 × 27x P/E
Adjust Assumptions
22.5x
7.4$
Key Value Driver
Normalized P/E multiple (22x base case)
Implied Market Multiple
17.5x
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (18 analysts)
$173.67
Divergence from AlphaVal
4%
Summary
Applying a 22x P/E to adjusted EPS of $7.40, the base-case value is $166.50 per share. DDM cross-check: $88.96.
Warnings
The company's reported profits differ from official accounting profits by 23025%. Check what costs are being left out of the adjusted number.
The company pays out 8750% of its profits as dividends. That leaves little cushion — the dividend could be cut if business slows down.
Dividend-based valuation: $88.96 (below our primary estimate by 47%). 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