DCF Studio

    CASY · NMS · Consumer Cyclical

    Casey's General Stores, Inc.

    Also onShortfallConsensus DriftCrosscheck

    Implied value per share

    USD 220.86

    Market price

    USD 597.48

    Implied upside

    -63.0%

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

    AdjustedCapital expenditure runs at 3.4% of revenue against depreciation of 2.4%. A perpetuity has to be a steady state, so the terminal year uses maintenance capex at depreciation and then charges the reinvestment terminal growth requires (g/ROIC of NOPAT). The bridge is shown under Terminal Value.

    Value Per Share

    Perpetuity growth
    USD 220.86-63.0%
    Exit multiple
    USD 509.93-14.7%
    Market price
    USD 597.48

    Same forecast, different terminal treatment. Percentages vs price.

    Forecast Cashflows

    Reporting currency (USD). Outflows negative.

    0m337m674mFY27FY28FY29FY30FY31
    Nominal FCFFDiscounted to todayUSD
    LineFY27FY28FY29FY30FY31CAGR
    RevenueUSD 18.5bnUSD 19.4bnUSD 20.4bnUSD 21.5bnUSD 22.6bn+5.2%
    EBITUSD 918.5mUSD 966.0mUSD 1.0bnUSD 1.1bnUSD 1.1bn+5.2%
    NOPATUSD 725.6mUSD 763.2mUSD 802.7mUSD 844.2mUSD 887.9m+5.2%
    Add depreciation & amortisationUSD 439.7mUSD 462.4mUSD 486.4mUSD 511.5mUSD 538.0m+5.2%
    Less capital expenditureUSD -627.1mUSD -659.5mUSD -693.6mUSD -729.5mUSD -767.3m+5.2%
    Less increase in working capitalUSD 12.3mUSD 12.9mUSD 13.6mUSD 14.3mUSD 15.0m-5.2%
    Free cashflow to firmUSD 550.5mUSD 579.0mUSD 609.0mUSD 640.5mUSD 673.7m+5.2%
    Discount factor0.95960.88370.81380.74940.6901-
    Present valueUSD 528.3mUSD 511.7mUSD 495.6mUSD 480.0mUSD 464.9m-3.1%
    Present Value Of The ForecastUSD 2.5bn

    Discount Rate

    Source shown per component. All overridable above.

    Risk-free rate5.00%US 10-year Treasury (^TNX)
    Equity risk premium5.50%Market assumption
    Beta0.727Reported 0.592, pulled toward 1.0 (Blume)
    Cost of equity8.99%Risk-free + beta x equity risk premium
    Cost of debt7.00%Assumed: risk-free + 2bp (interest expense not reported)
    Market capitalisationUSD 22.1bn88.4% of capital
    Total debtUSD 2.9bn11.6% of capital, book value as a proxy
    Tax rate21.0%Effective, capped at statutory
    WACC8.59%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 shareUSD 220.86

    77% of EV

    Forecast FCFF, final year
    USD 673.7m
    Capex at depreciation, working capital in reinvestment
    USD 887.9m
    Less reinvestment at g/ROIC (21.1% of NOPAT)
    USD -187.3m
    Capitalised
    USD 700.6m
    ROIC (reported)
    11.9%
    Terminal value, undiscounted
    USD 11.8bn
    Terminal value, discounted
    USD 8.1bn
    Enterprise value
    USD 10.6bn
    Less net debt
    USD 2.4bn
    Equity value
    USD 8.2bn

    Exit at 16.5x EBITDA

    Value per shareUSD 509.93

    88% of EV

    Terminal value, undiscounted
    USD 27.4bn
    Terminal value, discounted
    USD 18.9bn
    Enterprise value
    USD 21.4bn
    Less net debt
    USD 2.4bn
    Equity value
    USD 19.0bn

    Spread between methods: 79%.

    Sensitivity

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

    Long-run growth
    Discount rate1.50%2.00%2.50%3.00%3.50%
    6.59%316.88335.72358.97388.49427.32
    7.59%253.52263.97276.33291.23309.59
    8.59%208.10214.05220.86228.76238.07
    9.59%173.97177.32181.05185.24190.01
    10.59%147.40149.17151.09153.18155.48

    Outlined: this model. Green text: above today's price of 597.48. 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 year5.2%25.9%+20.7pp
    EBIT margin5.0%11.1%+6.1pp
    Discount rate8.6%5.1%-3.5pp
    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.