TPH
Tri Pointe Homes, Inc.
$46.95
Cyclical & Capital-Intensive
80%
Normalized Earnings × Cycle Multiple
Moderate
·
Conviction
Undervalued
Trading 27.5% below fair value
You pay
$46.95
Bear
$49.63
Fair
$64.73
Bull
$79.83
Bear
$49.63
+5.7%
$4.12 × 14x + net cash
Fair
$64.73
+37.9%
$4.12 × 18x + net cash
Bull
$79.83
+70.0%
$4.12 × 22x + net cash
Key Value Driver
Through-cycle normalized EPS ($4.12)
Implied Market Multiple
11.4x
Summary
Our base-case estimate uses Normalized Earnings × Cycle Multiple. We then blend that result with the average analyst price target of $47.00 from 22 analysts, using a 25% weight on analyst consensus. That produces an estimated intrinsic value of $64.73 per share.
Warnings
Wall Street's average price target is $47.00 (from 22 analysts). Our estimate is 50% above 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