STRL
Sterling Infrastructure, Inc.
$513.00
Cyclical & Capital-Intensive
80%
Normalized Earnings × Cycle Multiple
Strong
·
Conviction
Overvalued
Trading 541.9% above fair value
You pay
$513.00
Bear
$62.16
Fair
$79.92
Bull
$97.68
Bear
$62.16
-87.9%
$4.44 × 14x
Fair
$79.92
-84.4%
$4.44 × 18x
Bull
$97.68
-81.0%
$4.44 × 22x
Adjust Assumptions
18.0x
4.44$
Key Value Driver
Through-cycle normalized EPS ($4.44)
Implied Market Multiple
115.5x
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (10 analysts)
$733.00
Divergence from AlphaVal
89%
Summary
Using 7-year normalized EPS of $4.44 at a 18x cycle multiple, the base-case value is $79.92 per share.
Warnings
Recent profits ($9.38/share) are 111% above the mid-cycle average ($4.44). Buying based on peak profits is the most common mistake with boom-and-bust businesses.
Wall Street's average price target is $733.00 (from 10 analysts). Our estimate is 89% below the consensus -- consider that gap carefully.
Key Risks
- Standard 10-year DCF produces unreliable terminal values for cyclicals
- 'Cheap' P/E at cycle peak is the most common value trap — normalize first
- Captive finance subsidiaries have different risk profiles from manufacturing