ICHR
Ichor Holdings, Ltd.
$57.94
Cyclical & Capital-Intensive
80%
Normalized Earnings × Cycle Multiple
Strong
·
Conviction
Overvalued
Trading 711.9% above fair value
You pay
$57.94
Bear
$5.35
Fair
$7.14
Bull
$8.92
Bear
$5.35
-90.8%
$0.45 × 12x
Fair
$7.14
-87.7%
$0.45 × 16x
Bull
$8.92
-84.6%
$0.45 × 20x
Adjust Assumptions
16.0x
0.45$
Key Value Driver
Through-cycle normalized EPS ($0.45)
Implied Market Multiple
129.9x
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (14 analysts)
$96.00
Divergence from AlphaVal
93%
Summary
Using 7-year normalized EPS of $0.45 at a 16x cycle multiple, the base-case value is $7.14 per share. P/TBV cross-check: 7.0x.
Warnings
This company has a built-in lending arm whose debt is mixed in with the main business. We capped the debt adjustment to avoid overstating what the core business owes.
Price-to-book value of 7.0x is above the normal range for this type of business (0.7x-2.0x). The stock may already price in a strong cycle.
Wall Street's average price target is $96.00 (from 14 analysts). Our estimate is 93% below the consensus -- consider that gap carefully.
This stock is 49% below its 52-week high, with weak or declining earnings. That combination often signals real trouble, even though the valuation below is based on other fundamentals.
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