KRMN
Karman Holdings Inc.
$64.10
Cyclical & Capital-Intensive
80%
Normalized Earnings × Cycle Multiple
Strong
·
Conviction
Overvalued
Trading 163.1% above fair value
You pay
$64.10
Bear
$19.17
Fair
$24.36
Bull
$29.42
Bear
$19.17
-70.1%
$0.10 × 18x + net cash
Fair
$24.36
-62.0%
$0.10 × 22x + net cash
Bull
$29.42
-54.1%
$0.10 × 26x + net cash
Key Value Driver
Through-cycle normalized EPS ($0.10)
Implied Market Multiple
667.0x
Summary
Our base-case estimate uses Normalized Earnings × Cycle Multiple. We then blend that result with the average analyst price target of $114.50 from 8 analysts, using a 20% weight on analyst consensus. That produces an estimated intrinsic value of $24.36 per share.
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.
Wall Street's average price target is $114.50 (from 8 analysts). Our estimate is 98% 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