MH
McGraw Hill, Inc.
$13.69
Stable Earnings Power
80%
P/Adj-EPS × Normalized Multiple
Strong
·
Conviction
Overvalued
Trading 323.8% above fair value
You pay
$13.69
Bear
$2.66
Fair
$3.23
Bull
$3.80
Bear
$2.66
-80.6%
$0.19 × 14x P/E
Fair
$3.23
-76.4%
$0.19 × 17x P/E
Bull
$3.80
-72.2%
$0.19 × 20x P/E
Adjust Assumptions
17.0x
0.19$
Key Value Driver
Normalized P/E multiple (17x base case)
Implied Market Multiple
72.1x
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (9 analysts)
$16.14
Divergence from AlphaVal
80%
Summary
Applying a 17x P/E to adjusted EPS of $0.19, the base-case value is $3.23 per share.
Warnings
Wall Street's average price target is $16.14 (from 9 analysts). Our estimate is 80% below the consensus -- consider that gap carefully.
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