LOCO
El Pollo Loco Holdings, Inc.
$14.07
Stable Earnings Power
80%
P/Adj-EPS × Normalized Multiple
Moderate
·
Conviction
Fair Value
Trading 17.4% below fair value
You pay
$14.07
Bear
$14.04
Fair
$17.04
Bull
$20.04
Bear
$14.04
-0.2%
$1.04 × 14x P/E
Fair
$17.04
+21.1%
$1.04 × 17x P/E
Bull
$20.04
+42.4%
$1.04 × 20x P/E
Key Value Driver
Normalized P/E multiple (17x base case)
Implied Market Multiple
13.5x
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 $14.25 from 13 analysts, using a 20% weight on analyst consensus. That produces an estimated intrinsic value of $17.04 per share.
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