I thought I'd share a few data points I just pulled from the Bloomberg terminal.. As of 11 AM PST on May 2nd:
Consensus 2012 Non-GAAP EPS = $0.03, so in case there was doubt, the stock is no longer trading off of a P/E multiple.
Consensus 2012 EBITDA = $771M, which puts the enterprise value / '12 EBITDA multiple at 7.3x when the stock is at $8.50 / share. For reference, the average EV / next four quarters EBITDA multiple has been 6.4x, 5.9x and 5.8x since the beginning of 2010, 2011 and 2012, respectively. Take an average of the three averages, and you get 6.0x.
If you believe 6.0x could be a floor, then the company's enterprise value could still fall (7.3x - 6.0x)($771M) = (1.3x)($771M) = $1B. At $8.50 per share, the enterprise value is $4.8B. Subtract $1B, and you get $3.8B.
Now back out the net debt to arrive at an equity value of about $825M, or $3.90 per diluted share. This is a 54% discount to the current share price. Yikes.
The obvious follow-up question is whether looking at ACI on an EV / forward EBITDA basis makes sense. If P/E multiples lose relevancy, why not EBITDA multiples? Past a certain point, I think even EBITDA multiples go by the wayside.
In distressed situations, you make valuation decisions (in part) based on tangible book equity value. I can't say a company that generated something like $0.23 / share of free cash flow last quarter qualifies as 'distressed', but it sure is beginning to trade that way.. At $8.50 / share, the company is being valued at 0.61x tangible book value.
Since the beginning of 2010, 2011 and 2012, the company has averaged 1.8x, 1.6x and 0.9x LTM TBV, respectively. It's these last data points that make me believe the stock is highly unlikely to crater to $3.90, or about 0.28x tangible book value.
So what is the likely bottom for the TBV multiple? No idea. When large institutional guys decide to take a dump like today, all sense of 'floor value' goes out the door. Split the delta between $8.50 and $3.90, and you get $6.20, which is as good a guesstimate as any at this point.