MYRG
MYR Group Inc.
$446.90
Cyclical & Capital-Intensive
80%
Normalized Earnings × Cycle Multiple
Strong
·
Conviction
Overvalued
Trading 159.5% above fair value
You pay
$446.90
Bear
$135.21
Fair
$172.24
Bull
$209.27
Bear
$135.21
-69.7%
$4.95 × 14x + net cash
Fair
$172.24
-61.5%
$4.95 × 18x + net cash
Bull
$209.27
-53.2%
$4.95 × 22x + net cash
Key Value Driver
Through-cycle normalized EPS ($4.95)
Implied Market Multiple
90.3x
Summary
Our base-case estimate uses Normalized Earnings × Cycle Multiple. We then blend that result with the average analyst price target of $412.67 from 21 analysts, using a 25% weight on analyst consensus. That produces an estimated intrinsic value of $172.24 per share.
Warnings
Recent profits ($7.53/share) are 52% above the mid-cycle average ($4.95). Buying based on peak profits is the most common mistake with boom-and-bust businesses.
Price-to-book value of 14.7x 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 $412.67 (from 21 analysts). Our estimate is 78% 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