WTTR
Select Water Solutions, Inc.
$19.28
Stable Earnings Power
85%
P/Adj-EPS × Normalized Multiple
Strong
·
Conviction
Overvalued
Trading 86.2% above fair value
You pay
$19.28
Bear
$9.06
Fair
$10.35
Bull
$11.65
Bear
$9.06
-53.0%
$0.31 × 21x P/E
Fair
$10.35
-46.3%
$0.31 × 24x P/E
Bull
$11.65
-39.6%
$0.31 × 27x P/E
Key Value Driver
Normalized P/E multiple (24x base case)
Implied Market Multiple
62.2x
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 $22.00 from 14 analysts, using a 20% weight on analyst consensus. That produces an estimated intrinsic value of $10.35 per share.
Warnings
The company's reported profits differ from official accounting profits by 55%. Check what costs are being left out of the adjusted number.
The company pays out 140% of its profits as dividends. That leaves little cushion — the dividend could be cut if business slows down.
Wall Street's average price target is $22.00 (from 14 analysts). Our estimate is 66% below the consensus -- consider that gap carefully.
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