PLAB
Photronics, Inc.
$29.13
Cyclical & Capital-Intensive
80%
Normalized Earnings × Cycle Multiple
Mild
·
Conviction
Fair Value
Trading 10.3% below fair value
You pay
$29.13
Bear
$24.36
Fair
$32.48
Bull
$40.60
Bear
$24.36
-16.4%
$2.03 × 12x
Fair
$32.48
+11.5%
$2.03 × 16x
Bull
$40.60
+39.4%
$2.03 × 20x
Adjust Assumptions
16.0x
2.03$
Key Value Driver
Through-cycle normalized EPS ($2.03)
Implied Market Multiple
14.3x
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (11 analysts)
$55.00
Divergence from AlphaVal
41%
Summary
Using 7-year normalized EPS of $2.03 at a 16x cycle multiple, the base-case value is $32.48 per share. P/TBV cross-check: 1.5x.
Warnings
This company has heavy ongoing investment costs. Valuation shortcuts that ignore those costs can make the stock look cheaper than it really is.
Wall Street's average price target is $55.00 (from 11 analysts). Our estimate is 41% 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