DCF Tool

IAA

IAA Inc – General Warehousing and Storage
IAA, Inc. is a leading global digital marketplace connecting vehicle buyers and sellers. Leveraging leading-edge technology and focusing on innovation, IAA's unique platform facilitates the marketing and sale of total-loss, damaged and low-value vehicles. Headquartered near Chicago in Westchester, Illinois, IAA has nearly 4,000 employees and more than 200 facilities throughout the U.S., Canada and the United Kingdom. IAA serves a global buyer base - located throughout over 170 countries - and a full spectrum of sellers, including insurers, dealerships, fleet lease and rental car companies, and charitable organizations. Buyers have access to multiple digital bidding and buying channels, innovative vehicle merchandising, and efficient evaluation services, enhancing the overall purchasing experience. IAA offers sellers a comprehensive suite of services aimed at maximizing vehicle value, reducing administrative costs, shortening selling cycle time and delivering the highest economic returns.
Analysis Results
Intrinsic Value $81.66
Latest Price $38.30
Relative Value 53% undervalued
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Cash Flow (Millions)
Analysis Parameters
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Analysis Details
Growth Rate Projection

An exponential growth model was fit to the past cash flow data, giving more weight to more recent years. This model determined a growth rate estimate of 20.3%.

Weighted Average Cost of Capital (WACC)

The calculated WACC is 8.2%. This value is used as the default discount rate.

Value of Future Flows

Assuming a growth rate of 20.3%, the cash flows for the next 5 years are projected.

The present value of each year's flow is adjusted to present value using the discount rate.

Year Future flow (million) Present value (million)
2022 404 373
2023 486 415
2024 584 461
2025 702 512
2026 845 569
Terminal Value

Assuming a growth rate after the projection years of 2.0%, the terminal value of the company would be 13800 million. This corresponds to a present value of 8590 million.

Intrinsic Value Per Share

The total present value of the projected cash flows is 2330 million. Adding in the terminal value gives a total present value of 10900 million.

There are presently 134.0 million outstanding shares, so the intrinsic value per share is 81.66.

Financial Statements

The following data was to determine the past cash flows.

Current Assets 769,900,000
Current Cash 109,400,000
Current Liabilities 607,900,000
Current Debt 181,300,000
Non-Cash Working Capital (NCWC) 233,900,000
Change in NCWC 53,200,000
EBIT 445,900,000
Tax Provision 93,600,000
Depreciation and Amortization 86,500,000
Capital Expenditure -135,600,000
Unlevered Free Cash Flow 342,432,371
Current Assets 692,000,000
Current Cash 232,800,000
Current Liabilities 282,500,000
Current Debt 4,000,000
Non-Cash Working Capital (NCWC) 180,700,000
Change in NCWC 11,500,000
EBIT 312,000,000
Tax Provision 62,200,000
Depreciation and Amortization 81,100,000
Capital Expenditure -69,800,000
Unlevered Free Cash Flow 259,288,715
Current Assets 460,000,000
Current Cash 47,100,000
Current Liabilities 243,700,000
Current Debt 0
Non-Cash Working Capital (NCWC) 169,200,000
Change in NCWC -9,900,000
EBIT 317,800,000
Tax Provision 69,000,000
Depreciation and Amortization 88,400,000
Capital Expenditure -68,500,000
Unlevered Free Cash Flow 244,168,421

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