MYRG
MYR Group Inc.
$260.52
Cyclical & Capital-Intensive
80%
Normalized Earnings × Cycle Multiple
Strong
·
Conviction
Overvalued
Trading 192.4% above fair value
You pay
$260.52
Bear
$69.30
Fair
$89.10
Bull
$108.90
Bear
$69.30
-73.4%
$4.95 × 14x
Fair
$89.10
-65.8%
$4.95 × 18x
Bull
$108.90
-58.2%
$4.95 × 22x
Adjust Assumptions
18.0x
4.95$
Key Value Driver
Through-cycle normalized EPS ($4.95)
Implied Market Multiple
52.6x
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (22 analysts)
$399.80
Divergence from AlphaVal
78%
Summary
Using 7-year normalized EPS of $4.95 at a 18x cycle multiple, the base-case value is $89.10 per share. P/TBV cross-check: 8.6x.
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 8.6x 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 $399.80 (from 22 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