HTO
H2O America
$58.48
Stable Earnings Power
85%
P/Adj-EPS × Normalized Multiple
Moderate
·
Conviction
Overvalued
Trading 25.2% above fair value
You pay
$58.48
Bear
$40.88
Fair
$46.72
Bull
$52.56
Bear
$40.88
-30.1%
$2.92 × 14x P/E
Fair
$46.72
-20.1%
$2.92 × 16x P/E
Bull
$52.56
-10.1%
$2.92 × 18x P/E
Adjust Assumptions
16.0x
2.92$
Key Value Driver
Normalized P/E multiple (16x base case)
Implied Market Multiple
20.0x
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (6 analysts)
$66.50
Divergence from AlphaVal
30%
Summary
Applying a 16x P/E to adjusted EPS of $2.92, the base-case value is $46.72 per share. DDM cross-check: $47.05.
Warnings
Wall Street's average price target is $66.50 (from 6 analysts). Our estimate is 30% 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