Discounted Cash Flow (DCF) Analysis Unlevered
KAR Auction Services, Inc. (KAR)
$16.25
+0.59 (+3.77%)
All numbers are in Millions, Currency in USD
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 | 3,458 | 3,769.60 | 2,781.90 | 2,187.70 | 2,251.60 | 2,051.04 | 1,868.35 | 1,701.93 | 1,550.33 | 1,412.24 |
|---|---|---|---|---|---|---|---|---|---|---|
| Revenue (%) | ||||||||||
| EBITDA | 826.60 | 897.60 | 604.40 | 325.60 | 411.10 | 420.80 | 383.32 | 349.18 | 318.08 | 289.74 |
| EBITDA (%) | ||||||||||
| EBIT | 562 | 627.70 | 415.70 | 134.30 | 228.10 | 263.01 | 239.58 | 218.24 | 198.80 | 181.09 |
| EBIT (%) | ||||||||||
| Depreciation | 264.60 | 269.90 | 188.70 | 191.30 | 183 | 157.79 | 143.74 | 130.94 | 119.27 | 108.65 |
| 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 | 317.20 | 337.10 | 507.60 | 752.10 | 190 | 324.80 | 295.87 | 269.51 | 245.51 | 223.64 |
|---|---|---|---|---|---|---|---|---|---|---|
| Total Cash (%) | ||||||||||
| Account Receivables | 2,625.10 | 2,766.40 | 2,557.70 | 2,256.20 | 3,033 | 1,965.21 | 1,790.17 | 1,630.71 | 1,485.46 | 1,353.14 |
| Account Receivables (%) | ||||||||||
| Inventories | - | - | - | - | - | - | - | - | - | - |
| Inventories (%) | ||||||||||
| Accounts Payable | 682.70 | 820.30 | 704.60 | 688.90 | 553.45 | 504.15 | 459.25 | 418.34 | 381.08 | 347.13 |
| 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 | $ 16.25 |
|---|---|
| Beta | 1.051 |
| 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 | 7.705 |
| Total Debt | 2,183.10 |
| Total Equity | 1,968.90 |
| Total Capital | 4,152 |
| Debt Weighting | 52.58 |
| Equity Weighting | 47.42 |
| 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 | 3,458 | 3,769.60 | 2,781.90 | 2,187.70 | 2,251.60 | 2,051.04 | 1,868.35 | 1,701.93 | 1,550.33 | 1,412.24 |
|---|---|---|---|---|---|---|---|---|---|---|
| EBITDA | 826.60 | 897.60 | 604.40 | 325.60 | 411.10 | 420.80 | 383.32 | 349.18 | 318.08 | 289.74 |
| EBIT | 562 | 627.70 | 415.70 | 134.30 | 228.10 | 263.01 | 239.58 | 218.24 | 198.80 | 181.09 |
| Tax Rate | 9.05% | 24.72% | -44.89% | 90.74% | 34.48% | 22.82% | 22.82% | 22.82% | 22.82% | 22.82% |
| EBIAT | 511.17 | 472.54 | 602.30 | 12.44 | 149.44 | 202.99 | 184.91 | 168.44 | 153.44 | 139.77 |
| Depreciation | 264.60 | 269.90 | 188.70 | 191.30 | 183 | 157.79 | 143.74 | 130.94 | 119.27 | 108.65 |
| Accounts Receivable | - | -141.30 | 208.70 | 301.50 | -776.80 | 1,067.79 | 175.05 | 159.46 | 145.25 | 132.31 |
| 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 | 623.57 | 540.74 | 722.40 | 388.14 | -688.30 | 1,277.06 | 365.68 | 333.11 | 303.44 | 276.41 |
| WACC | ||||||||||
| PV UFCF | 1,208.77 | 327.62 | 282.48 | 243.55 | 210 | |||||
| SUM PV UFCF | 2,272.41 |
Terminal Value
| Growth in perpetuity method: | |
|---|---|
| Long-term growth rate | |
| WACC (%) | 5.65 |
| Free cash flow (t + 1) | 281.94 |
| Terminal Value | 7,724.40 |
| Present Value of Terminal Value | 5,868.36 |
Intrinsic Value
| Enterprise Value | 8,140.78 |
|---|---|
| Net Debt | 1,993.10 |
| Equity Value | 6,147.68 |
| Shares Outstanding | 121.16 |
| Equity Value Per Share | 50.74 |