DCF Studio

    CPRT · NMS · Industrials

    Copart, Inc.

    Also onShortfallConsensus DriftCrosscheck

    Implied value per share

    USD 26.04

    Market price

    USD 29.28

    Implied upside

    -11.1%

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

    AdjustedCapital expenditure runs at 11.8% of revenue against depreciation of 4.3%. 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 26.04-11.1%
    Exit multiple
    USD 33.81+15.5%
    Market price
    USD 29.28

    Same forecast, different terminal treatment. Percentages vs price.

    Forecast Cashflows

    Reporting currency (USD). Outflows negative.

    0bn1bn2bnFY26FY27FY28FY29FY30
    Nominal FCFFDiscounted to todayUSD
    LineFY26FY27FY28FY29FY30CAGR
    RevenueUSD 5.1bnUSD 5.6bnUSD 6.2bnUSD 6.8bnUSD 7.4bn+9.9%
    EBITUSD 1.9bnUSD 2.1bnUSD 2.3bnUSD 2.6bnUSD 2.8bn+9.9%
    NOPATUSD 1.6bnUSD 1.7bnUSD 1.9bnUSD 2.1bnUSD 2.3bn+9.9%
    Add depreciation & amortisationUSD 220.4mUSD 242.2mUSD 266.2mUSD 292.6mUSD 321.5m+9.9%
    Less capital expenditureUSD -603.8mUSD -663.6mUSD -729.3mUSD -801.5mUSD -880.9m+9.9%
    Less increase in working capitalUSD -110.2mUSD -121.1mUSD -133.1mUSD -146.2mUSD -160.7m+9.9%
    Free cashflow to firmUSD 1.1bnUSD 1.2bnUSD 1.3bnUSD 1.4bnUSD 1.5bn+9.9%
    Discount factor0.95090.85990.77760.70320.6358-
    Present valueUSD 1.0bnUSD 1.0bnUSD 996.3mUSD 990.1mUSD 983.9m-0.6%
    Present Value Of The ForecastUSD 5.0bn

    Discount Rate

    Source shown per component. All overridable above.

    Risk-free rate5.00%US 10-year Treasury (^TNX)
    Equity risk premium5.50%Market assumption
    Beta1.019Reported 1.029, pulled toward 1.0 (Blume)
    Cost of equity10.60%Risk-free + beta x equity risk premium
    Cost of debt7.00%Assumed: risk-free + 2bp (interest expense not reported)
    Market capitalisationUSD 27.1bn99.6% of capital
    Total debtUSD 103.7m0.4% of capital, book value as a proxy
    Tax rate19.5%Effective, capped at statutory
    WACC10.59%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 26.04

    76% of EV

    Forecast FCFF, final year
    USD 1.5bn
    Capex at depreciation, working capital in reinvestment
    USD 2.3bn
    Less reinvestment at g/ROIC (13.6% of NOPAT)
    USD -308.5m
    Capitalised
    USD 2.0bn
    ROIC (reported)
    18.4%
    Terminal value, undiscounted
    USD 24.8bn
    Terminal value, discounted
    USD 15.8bn
    Enterprise value
    USD 20.8bn
    Less net debt
    USD -4.7bn
    Equity value
    USD 25.5bn

    Exit at 11.7x EBITDA

    Value per shareUSD 33.81

    82% of EV

    Terminal value, undiscounted
    USD 36.8bn
    Terminal value, discounted
    USD 23.4bn
    Enterprise value
    USD 28.4bn
    Less net debt
    USD -4.7bn
    Equity value
    USD 33.0bn

    Spread between methods: 26%.

    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%
    8.59%31.1932.2333.4334.8336.50
    9.59%27.7228.4229.2130.1131.16
    10.59%25.0225.5026.0426.6527.33
    11.59%22.8723.2123.5823.9924.45
    12.59%21.1121.3521.6121.9022.21

    Outlined: this model. Green text: above today's price of 29.28. 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 year9.9%13.6%+3.7pp
    EBIT margin37.8%43.0%+5.2pp
    Discount rate10.6%9.6%-1.0pp
    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.