MCFT
MasterCraft Boat Holdings, Inc.
$23.44
Cyclical & Capital-Intensive
80%
Normalized Earnings × Cycle Multiple
Mild
·
Conviction
Overvalued
Trading 6.6% above fair value
You pay
$23.44
Bear
$17.38
Fair
$21.99
Bull
$26.61
Bear
$17.38
-25.9%
$2.96 × 4x + net cash
Fair
$21.99
-6.2%
$2.96 × 6x + net cash
Bull
$26.61
+13.5%
$2.96 × 7x + net cash
Key Value Driver
Through-cycle normalized EPS ($2.96)
Implied Market Multiple
7.9x
Summary
Our base-case estimate uses Normalized Earnings × Cycle Multiple. We then blend that result with the average analyst price target of $25.33 from 10 analysts, using a 20% weight on analyst consensus. That produces an estimated intrinsic value of $21.99 per share.
Warnings
Price-to-book value of 3.1x is above the normal range for this type of business (0.7x-2.0x). The stock may already price in a strong cycle.
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