DCF Studio

    CVNA · NYQ · Consumer Cyclical

    Carvana Co.

    Also onShortfallConsensus DriftCrosscheck

    Implied value per share

    USD -1.99

    Market price

    USD 72.00

    Implied upside

    -102.8%

    10-year forecast · Perpetuity growth terminal value · Mid-year discounting · Base case · Price 2026-11-02 · Accounts to 2025-12-31

    AdjustedBeta of 3.650 is not usable in a cost of equity. Clamped to 2.50.
    AdjustedFree cashflow is negative in at least one forecast year, so terminal value carries most of the valuation.

    Current EV/EBITDA of 38.3x sits outside a defensible 3-20x band, so the exit multiple is capped at 20.0x. A multiple that far out usually means EBITDA is the wrong denominator for this business.

    Value Per Share

    Perpetuity growth
    USD -1.99-102.8%
    Exit multiple
    USD 11.89-83.5%
    Market price
    USD 72.00

    Same forecast, different terminal treatment. Percentages vs price.

    Forecast Cashflows

    Reporting currency (USD). Outflows negative.

    -628m-47m534mFY26FY27FY28FY29FY30FY31FY32FY33FY34FY35
    Nominal FCFFDiscounted to todayUSD
    LineFY26FY27FY28FY29FY30FY31FY32FY33FY34FY35CAGR
    RevenueUSD 29.7bnUSD 37.5bnUSD 46.1bnUSD 55.5bnUSD 65.0bnUSD 74.3bnUSD 82.7bnUSD 89.7bnUSD 94.5bnUSD 96.9bn+14.0%
    EBITUSD 349.2mUSD 440.2mUSD 542.0mUSD 651.4mUSD 763.6mUSD 872.7mUSD 971.6mUSD 1.1bnUSD 1.1bnUSD 1.1bn+14.0%
    NOPATUSD 299.3mUSD 377.3mUSD 464.6mUSD 558.3mUSD 654.5mUSD 748.0mUSD 832.8mUSD 902.7mUSD 951.9mUSD 975.7m+14.0%
    Add depreciation & amortisationUSD 651.9mUSD 821.8mUSD 1.0bnUSD 1.2bnUSD 1.4bnUSD 1.6bnUSD 1.8bnUSD 2.0bnUSD 2.1bnUSD 2.1bn+14.0%
    Less capital expenditureUSD -443.0mUSD -594.5mUSD -776.2mUSD -986.1mUSD -1.2bnUSD -1.5bnUSD -1.7bnUSD -1.9bnUSD -2.1bnUSD -2.3bn+20.0%
    Capex, % of revenue1.5%1.6%1.7%1.8%1.9%2.0%2.1%2.2%2.3%2.4%-
    Less increase in working capitalUSD -1.1bnUSD -935.6mUSD -1.0bnUSD -1.1bnUSD -1.2bnUSD -1.1bnUSD -1.0bnUSD -838.0mUSD -589.5mUSD -285.3m-14.2%
    Free cashflow to firmUSD -627.7mUSD -330.9mUSD -346.0mUSD -335.7mUSD -291.9mUSD -207.7mUSD -79.4mUSD 92.0mUSD 300.4mUSD 533.7m-
    Discount factor0.93270.81140.70580.61400.53420.46470.40420.35170.30590.2661-
    Present valueUSD -585.5mUSD -268.5mUSD -244.2mUSD -206.1mUSD -155.9mUSD -96.5mUSD -32.1mUSD 32.4mUSD 91.9mUSD 142.0m-
    Present Value Of The ForecastUSD -1.3bn

    Discount Rate

    Source shown per component. All overridable above.

    Risk-free rate4.89%US 10-year Treasury (^TNX), 2026-11-02
    Equity risk premium4.23%Damodaran, January 2026
    Beta2.500Clamped from a reported 3.650
    Cost of equity15.47%Risk-free + beta x equity risk premium
    Cost of debt8.73%Interest expense / average total debt
    Market capitalisationUSD 79.8bn93.5% of capital
    Total debtUSD 5.5bn6.5% of capital, book value as a proxy
    Tax rate14.3%Effective, capped at statutory
    WACC14.95%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 -1.99

    380% of EV

    Forecast FCFF, final year
    USD 533.7m
    Capex at depreciation, working capital in reinvestment
    USD 975.7m
    Less reinvestment at g/ROIC (16.0% of NOPAT)
    USD -156.6m
    Capitalised
    USD 819.1m
    ROIC (reported)
    15.6%
    Terminal value, undiscounted
    USD 6.7bn
    Terminal value, discounted
    USD 1.8bn
    Enterprise value
    USD 471.7m
    Less net debt
    USD 2.7bn
    Equity value
    USD -2.2bn

    Exit at 20.0x EBITDA

    Value per shareUSD 11.89

    108% of EV

    Terminal value, undiscounted
    USD 65.3bn
    Terminal value, discounted
    USD 17.4bn
    Enterprise value
    USD 16.0bn
    Less net debt
    USD 2.7bn
    Equity value
    USD 13.3bn

    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%
    12.95%-1.32-1.34-1.36-1.37-1.39
    13.95%-1.65-1.68-1.71-1.74-1.77
    14.95%-1.93-1.96-1.99-2.03-2.06
    15.95%-2.14-2.18-2.21-2.24-2.28
    16.95%-2.31-2.34-2.37-2.40-2.43

    Outlined: this model. Green text: above today's price of 72.00. 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.

    InputActualModelImplied
    EBIT margin9.3%1.2%21.9%
    Discount rate-15.0%3.2%
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    Yahoo Finance and RBA data. General information, not advice. Methodology.