LINC
Lincoln Educational Services Corporation
$48.40
Stable Earnings Power
80%
P/Adj-EPS × Normalized Multiple
Strong
·
Conviction
Overvalued
Trading 121.3% above fair value
You pay
$48.40
Bear
$18.01
Fair
$21.88
Bull
$25.74
Bear
$18.01
-62.8%
$0.65 × 17x P/E
Fair
$21.88
-54.8%
$0.65 × 20x P/E
Bull
$25.74
-46.8%
$0.65 × 24x P/E
Key Value Driver
Normalized P/E multiple (20x base case)
Implied Market Multiple
74.5x
Summary
Our base-case estimate uses a valuation based on adjusted earnings per share and a normalized price-to-earnings multiple. We then blend that result with the average analyst price target of $47.60 from 15 analysts, using a 25% weight on analyst consensus. That produces an estimated intrinsic value of $21.88 per share.
Warnings
Wall Street's average price target is $47.60 (from 15 analysts). Our estimate is 72% 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