SBH
Sally Beauty Holdings, Inc.
$14.64
Stable Earnings Power
80%
P/Adj-EPS × Normalized Multiple
Strong
·
Conviction
Undervalued
Trading 45.8% below fair value
You pay
$14.64
Bear
$23.65
Fair
$27.03
Bull
$30.41
Bear
$23.65
+61.6%
$1.93 × 14x P/E
Fair
$27.03
+84.6%
$1.93 × 16x P/E
Bull
$30.41
+107.7%
$1.93 × 18x P/E
Key Value Driver
Normalized P/E multiple (16x base case)
Implied Market Multiple
7.6x
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 $18.00 from 30 analysts, using a 30% weight on analyst consensus. That produces an estimated intrinsic value of $27.03 per share.
Warnings
Wall Street's average price target is $18.00 (from 30 analysts). Our estimate is 72% above 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