RMR
The RMR Group Inc.
$18.16
Stable Earnings Power
75%
P/Adj-EPS × Normalized Multiple
Strong
·
Conviction
Undervalued
Trading 42.9% below fair value
You pay
$18.16
Bear
$25.43
Fair
$31.79
Bull
$38.14
Bear
$25.43
+40.0%
$2.08 × 12x P/E
Fair
$31.79
+75.0%
$2.08 × 15x P/E
Bull
$38.14
+110.0%
$2.08 × 18x P/E
Adjust Assumptions
15.3x
2.08$
Key Value Driver
Normalized P/E multiple (15x base case)
Implied Market Multiple
8.7x
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (14 analysts)
$26.00
Divergence from AlphaVal
22%
Summary
Applying a 15x P/E to adjusted EPS of $2.08, the base-case value is $31.79 per share. DDM cross-check: $34.48.
Warnings
The company's reported profits differ from official accounting profits by 102%. Check what costs are being left out of the adjusted number.
The company pays out 175% of its profits as dividends. That leaves little cushion — the dividend could be cut if business slows down.
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