LSCC
Lattice Semiconductor Corporation
$115.00
Cyclical & Capital-Intensive
80%
Normalized Earnings × Cycle Multiple
Strong
·
Conviction
Overvalued
Trading 972.8% above fair value
You pay
$115.00
Bear
$8.04
Fair
$10.72
Bull
$13.40
Bear
$8.04
-93.0%
$0.67 × 12x
Fair
$10.72
-90.7%
$0.67 × 16x
Bull
$13.40
-88.3%
$0.67 × 20x
Adjust Assumptions
16.0x
0.67$
Key Value Driver
Through-cycle normalized EPS ($0.67)
Implied Market Multiple
171.6x
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (17 analysts)
$162.14
Divergence from AlphaVal
93%
Summary
Using 7-year normalized EPS of $0.67 at a 16x cycle multiple, the base-case value is $10.72 per share. P/TBV cross-check: 41.4x.
Warnings
Price-to-book value of 41.4x 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 $162.14 (from 17 analysts). Our estimate is 93% 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