TDS
Telephone and Data Systems, Inc.
$39.30
Stable Earnings Power
40%
P/Adj-EPS × Normalized Multiple
Moderate
·
Conviction
Overvalued
Trading 24.2% above fair value
You pay
$39.30
Bear
$25.32
Fair
$31.65
Bull
$37.98
Bear
$25.32
-35.6%
$2.18 × 12x P/E
Fair
$31.65
-19.5%
$2.18 × 15x P/E
Bull
$37.98
-3.3%
$2.18 × 18x P/E
Key Value Driver
Normalized P/E multiple (15x base case)
Implied Market Multiple
18.1x
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 $27.67 from 7 analysts, using a 20% weight on analyst consensus. That produces an estimated intrinsic value of $31.65 per share.
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