SHEN
Shenandoah Telecommunications Company
$10.40
Leveraged Infrastructure
80%
EV/EBITDA × Telecom Multiple
Strong
·
Conviction
Overvalued
Trading 63.3% above fair value
You pay
$10.40
Bear
$3.87
Fair
$6.37
Bull
$8.87
Bear
$3.87
-62.8%
EBITDA $0B × 7.2x − $1B debt
Fair
$6.37
-38.8%
EBITDA $0B × 8.4x − $1B debt
Bull
$8.87
-14.8%
EBITDA $0B × 9.6x − $1B debt
Adjust Assumptions
8.4x
Key Value Driver
EV/EBITDA multiple (8.4x) vs. 5.3× leverage
Implied Market Multiple
10.3x
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (8 analysts)
$27.00
Divergence from AlphaVal
76%
Summary
At 8.4x EV/EBITDA on $0B EBITDA, enterprise value is $1B. After subtracting $1B net debt, equity value is $6.37 per share.
Warnings
Debt is 5.3x annual operating profit. Because the company carries so much debt, even small shifts in business value cause big swings in the stock price.
We value this business based on total operating profit relative to total enterprise value (debt + equity). Profit-per-share metrics are unreliable when debt makes up most of the company's value.
Wall Street's average price target is $27.00 (from 8 analysts). Our estimate is 76% below the consensus -- consider that gap carefully.
This stock is 40% below its 52-week high, with weak or declining earnings. That combination often signals real trouble, even though the valuation below is based on other fundamentals.
Key Risks
- Debt refinancing at higher rates compresses equity value quickly
- EBITDA flatters — capex, interest, and taxes eat the cash flow
- Cord-cutting and wireless substitution are structural headwinds for cable