WLDN
Willdan Group, Inc.
$71.90
Cyclical & Capital-Intensive
80%
Normalized Earnings × Cycle Multiple
Strong
·
Conviction
Overvalued
Trading 399.3% above fair value
You pay
$71.90
Bear
$11.20
Fair
$14.40
Bull
$17.60
Bear
$11.20
-84.4%
$0.80 × 14x
Fair
$14.40
-80.0%
$0.80 × 18x
Bull
$17.60
-75.5%
$0.80 × 22x
Adjust Assumptions
18.0x
0.8$
Key Value Driver
Through-cycle normalized EPS ($0.80)
Implied Market Multiple
89.9x
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (7 analysts)
$112.67
Divergence from AlphaVal
87%
Summary
Using 7-year normalized EPS of $0.80 at a 18x cycle multiple, the base-case value is $14.40 per share. P/TBV cross-check: 12.2x.
Warnings
Recent profits ($3.49/share) are 336% above the mid-cycle average ($0.80). Buying based on peak profits is the most common mistake with boom-and-bust businesses.
Price-to-book value of 12.2x is above the normal range for this type of business (0.7x-2.0x). The stock may already price in a strong cycle.
Wall Street's average price target is $112.67 (from 7 analysts). Our estimate is 87% below 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