MCFT
MasterCraft Boat Holdings, Inc.
$24.18
Cyclical & Capital-Intensive
80%
Normalized Earnings × Cycle Multiple
Mild
·
Conviction
Overvalued
Trading 6.4% above fair value
You pay
$24.18
Bear
$17.96
Fair
$22.73
Bull
$27.50
Bear
$17.96
-25.7%
$2.96 × 4x + net cash
Fair
$22.73
-6.0%
$2.96 × 6x + net cash
Bull
$27.50
+13.7%
$2.96 × 7x + net cash
Key Value Driver
Through-cycle normalized EPS ($2.96)
Implied Market Multiple
8.2x
Summary
Our base-case estimate uses Normalized Earnings × Cycle Multiple. We then blend that result with the average analyst price target of $29.00 from 10 analysts, using a 20% weight on analyst consensus. That produces an estimated intrinsic value of $22.73 per share.
Warnings
Price-to-book value of 3.2x 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 $29.00 (from 10 analysts). Our estimate is 27% 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