SEM
Select Medical Holdings Corporation
$16.51
Stable Earnings Power
80%
P/Adj-EPS × Normalized Multiple
Moderate
·
Conviction
Undervalued
Trading 33.7% below fair value
You pay
$16.51
Bear
$19.92
Fair
$24.90
Bull
$29.88
Bear
$19.92
+20.7%
$1.66 × 12x P/E
Fair
$24.90
+50.8%
$1.66 × 15x P/E
Bull
$29.88
+81.0%
$1.66 × 18x P/E
Adjust Assumptions
15.0x
1.66$
Key Value Driver
Normalized P/E multiple (15x base case)
Implied Market Multiple
9.9x
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (14 analysts)
$16.50
Divergence from AlphaVal
51%
Summary
Applying a 15x P/E to adjusted EPS of $1.66, the base-case value is $24.90 per share.
Warnings
The company's reported profits differ from official accounting profits by 41%. Check what costs are being left out of the adjusted number.
Wall Street's average price target is $16.50 (from 14 analysts). Our estimate is 51% 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