Discounted Cash Flow (DCF) Analysis Levered

KAR Auction Services, Inc. (KAR)

$15.82

+0.70 (+4.63%)
All numbers are in Millions, Currency in USD
Stock DCF: 23.64 | 15.82 | undervalue

Free Cash Flow

Year
A/P
2017
Actual
2018
Actual
2019
Actual
2020
Actual
2021
Actual
2022
Projected
2023
Projected
2024
Projected
2025
Projected
2026
Projected
Revenue 3,4583,769.602,781.902,187.702,251.602,051.041,868.351,701.931,550.331,412.24
Revenue (%)
Operating Cash Flow 588.80749.80542384.40413.20378.72344.98314.26286.26260.77
Operating Cash Flow (%)
Capital Expenditure -152.20-198-161.60-101.40-108.50-102.21-93.11-84.81-77.26-70.38
Capital Expenditure (%)
Free Cash Flow 436.60551.80380.40283304.70276.51251.88229.44209.01190.39

Weighted Average Cost Of Capital

Share price $ 15.82
Beta 1.043
Diluted Shares Outstanding 121.16
Cost of Debt
Tax Rate 34.48
After-tax Cost of Debt 3.80%
Risk-Free Rate
Market Risk Premium
Cost of Equity 8.048
Total Debt 2,183.10
Total Equity 1,916.80
Total Capital 4,099.90
Debt Weighting 53.25
Equity Weighting 46.75
Wacc

Build Up Free Cash Flow

Year
A/P
2017
Actual
2018
Actual
2019
Actual
2020
Actual
2021
Actual
2022
Projected
2023
Projected
2024
Projected
2025
Projected
2026
Projected
Revenue 3,4583,769.602,781.902,187.702,251.602,051.041,868.351,701.931,550.331,412.24
Operating Cash Flow 588.80749.80542384.40413.20378.72344.98314.26286.26260.77
Capital Expenditure -152.20-198-161.60-101.40-108.50-102.21-93.11-84.81-77.26-70.38
Free Cash Flow 436.60551.80380.40283304.70276.51251.88229.44209.01190.39
WACC
PV LFCF 261.37225.06193.79166.87143.69
SUM PV LFCF 990.79

Terminal Value

Growth in perpetuity method:
Long-term growth rate
WACC (%) 5.79
Free cash flow (t + 1) 194.20
Terminal Value 5,123.91
Present Value of Terminal Value 3,867.04

Intrinsic Value

Enterprise Value 4,857.83
Net Debt 1,993.10
Equity Value 2,864.73
Shares Outstanding 121.16
Equity Value Per Share 23.64