JVA
Coffee Holding Co., Inc.
$4.22
Stable Earnings Power
80%
P/Adj-EPS × Normalized Multiple
Mild
·
Conviction
Fair Value
Trading 2.9% below fair value
You pay
$4.22
Bear
$3.58
Fair
$4.35
Bull
$5.12
Bear
$3.58
-15.1%
$0.26 × 14x P/E
Fair
$4.35
+3.0%
$0.26 × 17x P/E
Bull
$5.12
+21.2%
$0.26 × 20x P/E
Key Value Driver
Normalized P/E multiple (17x base case)
Implied Market Multiple
16.5x
Summary
Applying a 17x P/E to adjusted EPS of $0.26, the base-case value is $4.35 per share.
Warnings
The company pays out 96% of its profits as dividends. That leaves little cushion — the dividend could be cut if business slows down.
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