TDS
Telephone and Data Systems, Inc.
$34.32
Stable Earnings Power
40%
P/Adj-EPS × Normalized Multiple
Mild
·
Conviction
Overvalued
Trading 8.4% above fair value
You pay
$34.32
Bear
$25.31
Fair
$31.65
Bull
$37.98
Bear
$25.31
-26.2%
$2.18 × 12x P/E
Fair
$31.65
-7.8%
$2.18 × 15x P/E
Bull
$37.98
+10.7%
$2.18 × 18x P/E
Key Value Driver
Normalized P/E multiple (15x base case)
Implied Market Multiple
15.8x
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