WD
Walker & Dunlop, Inc.
$48.20
Stable Earnings Power
40%
P/Adj-EPS × Normalized Multiple
Strong
·
Conviction
Undervalued
Trading 41.1% below fair value
You pay
$48.20
Bear
$65.44
Fair
$81.80
Bull
$98.16
Bear
$65.44
+35.8%
$5.17 × 13x P/E
Fair
$81.80
+69.7%
$5.17 × 17x P/E
Bull
$98.16
+103.6%
$5.17 × 20x P/E
Key Value Driver
Normalized P/E multiple (17x base case)
Implied Market Multiple
9.3x
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 $69.00 from 15 analysts, using a 25% weight on analyst consensus. That produces an estimated intrinsic value of $81.80 per share.
Warnings
The company's reported profits differ from official accounting profits by 215%. Check what costs are being left out of the adjusted number.
The company pays out 165% of its profits as dividends. That leaves little cushion — the dividend could be cut if business slows down.
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