KLIC
Kulicke and Soffa Industries, Inc.
$88.54
Cyclical & Capital-Intensive
80%
Normalized Earnings × Cycle Multiple
Strong
·
Conviction
Overvalued
Trading 255.5% above fair value
You pay
$88.54
Bear
$18.68
Fair
$24.91
Bull
$31.14
Bear
$18.68
-78.9%
$1.56 × 12x
Fair
$24.91
-71.9%
$1.56 × 16x
Bull
$31.14
-64.8%
$1.56 × 20x
Adjust Assumptions
16.0x
1.56$
Key Value Driver
Through-cycle normalized EPS ($1.56)
Implied Market Multiple
56.9x
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (11 analysts)
$62.50
Divergence from AlphaVal
60%
Summary
Using 7-year normalized EPS of $1.56 at a 16x cycle multiple, the base-case value is $24.91 per share. P/TBV cross-check: 6.2x.
Warnings
Price-to-book value of 6.2x 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 $62.50 (from 11 analysts). Our estimate is 60% below the consensus -- consider that gap carefully.
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