HTO
H2O America
$58.13
Stable Earnings Power
85%
P/Adj-EPS × Normalized Multiple
Mild
·
Conviction
Overvalued
Trading 13.8% above fair value
You pay
$58.13
Bear
$44.70
Fair
$51.08
Bull
$57.45
Bear
$44.70
-23.1%
$3.02 × 14x P/E
Fair
$51.08
-12.1%
$3.02 × 16x P/E
Bull
$57.45
-1.2%
$3.02 × 18x P/E
Key Value Driver
Normalized P/E multiple (16x base case)
Implied Market Multiple
19.2x
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 $61.80 from 5 analysts, using a 20% weight on analyst consensus. That produces an estimated intrinsic value of $51.08 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