DCF Studio

    CPAY · NYQ · Technology

    Corpay, Inc.

    Also onShortfallConsensus DriftCrosscheck

    Implied value per share

    USD 443.09

    Market price

    USD 397.76

    Implied upside

    +11.4%

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

    Value Per Share

    Perpetuity growth
    USD 443.09+11.4%
    Exit multiple
    USD 589.93+48.3%
    Market price
    USD 397.76

    Same forecast, different terminal treatment. Percentages vs price.

    Forecast Cashflows

    Reporting currency (USD). Outflows negative.

    0bn2bn3bnFY26FY27FY28FY29FY30
    Nominal FCFFDiscounted to todayUSD
    LineFY26FY27FY28FY29FY30CAGR
    RevenueUSD 5.0bnUSD 5.5bnUSD 6.0bnUSD 6.6bnUSD 7.2bn+9.7%
    EBITUSD 2.2bnUSD 2.4bnUSD 2.6bnUSD 2.8bnUSD 3.1bn+9.7%
    NOPATUSD 1.7bnUSD 1.9bnUSD 2.1bnUSD 2.3bnUSD 2.5bn+9.7%
    Add depreciation & amortisationUSD 445.7mUSD 489.1mUSD 536.7mUSD 589.0mUSD 646.3m+9.7%
    Less capital expenditureUSD -215.6mUSD -236.6mUSD -259.6mUSD -284.8mUSD -312.6m+9.7%
    Less increase in working capitalUSD 440.8mUSD 483.7mUSD 530.7mUSD 582.4mUSD 639.1m-9.7%
    Free cashflow to firmUSD 2.4bnUSD 2.6bnUSD 2.9bnUSD 3.1bnUSD 3.4bn+9.7%
    Discount factor0.96070.88670.81840.75540.6972-
    Present valueUSD 2.3bnUSD 2.3bnUSD 2.3bnUSD 2.4bnUSD 2.4bn+1.3%
    Present Value Of The ForecastUSD 11.7bn

    Discount Rate

    Source shown per component. All overridable above.

    Risk-free rate5.00%US 10-year Treasury (^TNX)
    Equity risk premium5.50%Market assumption
    Beta0.915Reported 0.873, pulled toward 1.0 (Blume)
    Cost of equity10.03%Risk-free + beta x equity risk premium
    Cost of debt5.00%Floored at the risk-free rate (implied cost of debt was lower)
    Market capitalisationUSD 26.1bn72.3% of capital
    Total debtUSD 10.0bn27.7% of capital, book value as a proxy
    Tax rate21.0%Effective, capped at statutory
    WACC8.35%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 443.09

    70% of EV

    Forecast FCFF, final year
    USD 3.4bn
    Capex at depreciation, working capital in reinvestment
    USD 2.8bn
    Less reinvestment at g/ROIC (20.5% of NOPAT)
    USD -577.0m
    Capitalised
    USD 2.2bn
    ROIC (reported)
    12.2%
    Terminal value, undiscounted
    USD 39.3bn
    Terminal value, discounted
    USD 27.4bn
    Enterprise value
    USD 39.1bn
    Less net debt
    USD 7.6bn
    Equity value
    USD 31.5bn

    Exit at 14.4x EBITDA

    Value per shareUSD 589.93

    76% of EV

    Terminal value, undiscounted
    USD 54.2bn
    Terminal value, discounted
    USD 37.8bn
    Enterprise value
    USD 49.5bn
    Less net debt
    USD 7.6bn
    Equity value
    USD 41.9bn

    Spread between methods: 28%.

    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%
    6.35%617.89655.54702.66763.50845.28
    7.35%500.50521.37546.32576.73614.74
    8.35%417.18429.20443.09459.37478.77
    9.35%354.91361.89369.72378.63388.86
    10.35%306.57310.51314.82319.57324.86

    Outlined: this model. Green text: above today's price of 397.76. 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 year9.7%7.9%-1.9pp
    EBIT margin43.4%39.1%-4.3pp
    Discount rate8.3%8.9%+0.6pp
    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.