WD
Walker & Dunlop, Inc.
$50.37
Stable Earnings Power
40%
P/Adj-EPS × Normalized Multiple
Moderate
·
Conviction
Undervalued
Trading 39.0% below fair value
You pay
$50.37
Bear
$66.04
Fair
$82.55
Bull
$99.06
Bear
$66.04
+31.1%
$5.17 × 13x P/E
Fair
$82.55
+63.9%
$5.17 × 17x P/E
Bull
$99.06
+96.7%
$5.17 × 20x P/E
Key Value Driver
Normalized P/E multiple (17x base case)
Implied Market Multiple
9.7x
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 $72.00 from 15 analysts, using a 25% weight on analyst consensus. That produces an estimated intrinsic value of $82.55 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