LSCC
Lattice Semiconductor Corporation
$132.46
Cyclical & Capital-Intensive
80%
Normalized Earnings × Cycle Multiple
Strong
·
Conviction
Overvalued
Trading 203.6% above fair value
You pay
$132.46
Bear
$33.12
Fair
$43.62
Bull
$54.13
Bear
$33.12
-75.0%
$0.67 × 12x + net cash
Fair
$43.62
-67.1%
$0.67 × 16x + net cash
Bull
$54.13
-59.1%
$0.67 × 20x + net cash
Key Value Driver
Through-cycle normalized EPS ($0.67)
Implied Market Multiple
197.7x
Summary
Our base-case estimate uses Normalized Earnings × Cycle Multiple. We then blend that result with the average analyst price target of $141.11 from 17 analysts, using a 25% weight on analyst consensus. That produces an estimated intrinsic value of $43.62 per share.
Warnings
Price-to-book value of 46.0x 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 $141.11 (from 17 analysts). Our estimate is 92% 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