Discounted Cash Flow (DCF) Analysis Unlevered

KAR Auction Services, Inc. (KAR)

$15.82

+0.70 (+4.63%)
All numbers are in Millions, Currency in USD
Stock DCF: 48.59 | 15.82 | undervalue

Operating Data

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 (%)
EBITDA 826.60897.60604.40325.60411.10420.80383.32349.18318.08289.74
EBITDA (%)
EBIT 562627.70415.70134.30228.10263.01239.58218.24198.80181.09
EBIT (%)
Depreciation 264.60269.90188.70191.30183157.79143.74130.94119.27108.65
Depreciation (%)

Balance Sheet Data

Year
A/P
2017
Actual
2018
Actual
2019
Actual
2020
Actual
2021
Actual
2022
Projected
2023
Projected
2024
Projected
2025
Projected
2026
Projected
Total Cash 317.20337.10507.60752.10190324.80295.87269.51245.51223.64
Total Cash (%)
Account Receivables 2,625.102,766.402,557.702,256.203,0331,965.211,790.171,630.711,485.461,353.14
Account Receivables (%)
Inventories ----------
Inventories (%)
Accounts Payable 682.70820.30704.60688.90553.45504.15459.25418.34381.08347.13
Accounts Payable (%)
Capital Expenditure -152.20-198-161.60-101.40-108.50-102.21-93.11-84.81-77.26-70.38
Capital Expenditure (%)

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

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
EBITDA 826.60897.60604.40325.60411.10420.80383.32349.18318.08289.74
EBIT 562627.70415.70134.30228.10263.01239.58218.24198.80181.09
Tax Rate 9.05%24.72%-44.89%90.74%34.48%22.82%22.82%22.82%22.82%22.82%
EBIAT 511.17472.54602.3012.44149.44202.99184.91168.44153.44139.77
Depreciation 264.60269.90188.70191.30183157.79143.74130.94119.27108.65
Accounts Receivable --141.30208.70301.50-776.801,067.79175.05159.46145.25132.31
Inventories ----------
Accounts Payable -137.60-115.70-15.70-135.45-49.30-44.91-40.91-37.26-33.94
Capital Expenditure -152.20-198-161.60-101.40-108.50-102.21-93.11-84.81-77.26-70.38
UFCF 623.57540.74722.40388.14-688.301,277.06365.68333.11303.44276.41
WACC
PV UFCF 1,207.17326.75281.36242.27208.61
SUM PV UFCF 2,266.15

Terminal Value

Growth in perpetuity method:
Long-term growth rate
WACC (%) 5.79
Free cash flow (t + 1) 281.94
Terminal Value 7,439.06
Present Value of Terminal Value 5,614.29

Intrinsic Value

Enterprise Value 7,880.45
Net Debt 1,993.10
Equity Value 5,887.35
Shares Outstanding 121.16
Equity Value Per Share 48.59