LMB
Limbach Holdings, Inc.
$48.32
Cyclical & Capital-Intensive
80%
Normalized Earnings × Cycle Multiple
Strong
·
Conviction
Overvalued
Trading 52.5% above fair value
You pay
$48.32
Bear
$24.64
Fair
$31.68
Bull
$38.72
Bear
$24.64
-49.0%
$1.76 × 14x
Fair
$31.68
-34.4%
$1.76 × 18x
Bull
$38.72
-19.9%
$1.76 × 22x
Adjust Assumptions
18.0x
1.76$
Key Value Driver
Through-cycle normalized EPS ($1.76)
Implied Market Multiple
27.5x
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (7 analysts)
$73.33
Divergence from AlphaVal
57%
Summary
Using 7-year normalized EPS of $1.76 at a 18x cycle multiple, the base-case value is $31.68 per share. P/TBV cross-check: 7.6x.
Warnings
Recent profits ($4.02/share) are 128% above the mid-cycle average ($1.76). Buying based on peak profits is the most common mistake with boom-and-bust businesses.
Price-to-book value of 7.6x 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 $73.33 (from 7 analysts). Our estimate is 57% 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