DCF Studio

    CAR.AX · ASX · Communication Services

    CAR Group Limited

    Also onShortfallConsensus DriftCrosscheck

    Implied value per share

    AUD 18.93

    Market price

    AUD 23.24

    Implied upside

    -18.5%

    5-year forecast · Perpetuity growth terminal value · Mid-year discounting · Base case

    AdjustedSome line items were not reported and have been derived. Each one is labelled in the workings below.

    Value Per Share

    Perpetuity growth
    AUD 18.93-18.5%
    Exit multiple
    AUD 41.59+79.0%
    Market price
    AUD 23.24

    Same forecast, different terminal treatment. Percentages vs price.

    Forecast Cashflows

    Reporting currency (AUD). Outflows negative.

    0m452m904mFY27FY28FY29FY30FY31
    Nominal FCFFDiscounted to todayAUD
    LineFY27FY28FY29FY30FY31CAGR
    RevenueAUD 1.5bnAUD 1.7bnAUD 2.0bnAUD 2.4bnAUD 2.8bn+17.1%
    EBITAUD 555.8mAUD 650.7mAUD 761.8mAUD 891.8mAUD 1.0bn+17.1%
    NOPATAUD 435.7mAUD 510.1mAUD 597.2mAUD 699.1mAUD 818.4m+17.1%
    Add depreciation & amortisationAUD 209.3mAUD 245.0mAUD 286.8mAUD 335.8mAUD 393.1m+17.1%
    Less capital expenditureAUD -153.1mAUD -179.2mAUD -209.8mAUD -245.6mAUD -287.5m+17.1%
    Less increase in working capitalAUD -10.8mAUD -12.6mAUD -14.8mAUD -17.3mAUD -20.3m+17.1%
    Free cashflow to firmAUD 481.1mAUD 563.3mAUD 659.4mAUD 771.9mAUD 903.7m+17.1%
    Discount factor0.95530.87190.79580.72630.6629-
    Present valueAUD 459.7mAUD 491.1mAUD 524.7mAUD 560.7mAUD 599.1m+6.8%
    Present Value Of The ForecastAUD 2.6bn

    Discount Rate

    Source shown per component. All overridable above.

    Risk-free rate5.35%Australian Government 10-year (RBA F2)
    Equity risk premium6.00%Market assumption
    Beta0.866Reported 0.800, pulled toward 1.0 (Blume)
    Cost of equity10.54%Risk-free + beta x equity risk premium
    Cost of debt5.35%Floored at the risk-free rate (implied cost of debt was lower)
    Market capitalisationAUD 8.8bn84.6% of capital
    Total debtAUD 1.6bn15.4% of capital, book value as a proxy
    Tax rate21.6%Effective, capped at statutory
    WACC9.57%E/V x Re + D/V x Rd x (1 - t)

    Terminal Value

    Perpetuity growth is intrinsic. The exit multiple defaults to the company's current EV/EBITDA, so it answers a different question - what the shares are worth if today's rating holds and EBITDA grows as forecast.

    Perpetuity growth at 2.50%

    Value per shareAUD 18.93

    69% of EV

    Forecast FCFF, final year
    AUD 903.7m
    Capex at depreciation, working capital in reinvestment
    AUD 818.4m
    Less reinvestment at g/ROIC (26.1% of NOPAT)
    AUD -213.9m
    Capitalised
    AUD 604.6m
    ROIC (WACC floor)
    9.6%
    Terminal value, undiscounted
    AUD 8.8bn
    Terminal value, discounted
    AUD 5.8bn
    Enterprise value
    AUD 8.4bn
    Less net debt
    AUD 1.3bn
    Equity value
    AUD 7.2bn

    Exit at 15.1x EBITDA

    Value per shareAUD 41.59

    85% of EV

    Terminal value, undiscounted
    AUD 21.7bn
    Terminal value, discounted
    AUD 14.4bn
    Enterprise value
    AUD 17.0bn
    Less net debt
    AUD 1.3bn
    Equity value
    AUD 15.8bn

    Spread between methods: 75%.

    Sensitivity

    Value per share (AUD) by discount rate and long-run growth.

    Long-run growth
    Discount rate1.50%2.00%2.50%3.00%3.50%
    7.57%25.0325.2425.4725.7326.03
    8.57%21.4421.5321.6121.7021.79
    9.57%18.7818.8618.9319.0019.08
    10.57%16.6316.6916.7616.8216.89
    11.57%14.8514.9114.9615.0215.08

    Outlined: this model. Green text: above today's price of 23.24. Shading: distance from this model's own value.

    Priced In

    What each input would have to be to justify the current price, one at a time.

    InputModelImpliedGap
    Revenue growth, every year17.1%21.9%+4.8pp
    EBIT margin37.9%45.4%+7.5pp
    Discount rate9.6%8.1%-1.5pp
    Download as Excel

    Live formulas, not pasted numbers - edit a driver and the workbook reprices.

    Yahoo Finance and RBA data. General information, not advice. Methodology.