RMAX
RE/MAX Holdings, Inc.
$11.39
Stable Earnings Power
75%
P/Adj-EPS × Normalized Multiple
Mild
·
Conviction
Fair Value
Trading 5.2% below fair value
You pay
$11.39
Bear
$9.62
Fair
$12.02
Bull
$14.42
Bear
$9.62
-15.6%
$0.72 × 12x P/E
Fair
$12.02
+5.5%
$0.72 × 15x P/E
Bull
$14.42
+26.6%
$0.72 × 18x P/E
Key Value Driver
Normalized P/E multiple (15x base case)
Implied Market Multiple
15.7x
Summary
Our base-case estimate uses a valuation based on adjusted earnings per share and a normalized price-to-earnings multiple. We then blend that result with the average analyst price target of $16.67 from 14 analysts, using a 20% weight on analyst consensus. That produces an estimated intrinsic value of $12.02 per share.
Warnings
The company's reported profits differ from official accounting profits by 81%. Check what costs are being left out of the adjusted number.
The company pays out 230% of its profits as dividends. That leaves little cushion — the dividend could be cut if business slows down.
Dividend-based valuation: $15.86 (above our primary estimate by 46%). Large gaps may signal the dividend doesn't reflect full earning power.
Wall Street's average price target is $16.67 (from 14 analysts). Our estimate is 35% 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