DCF Tool

KMX

Carmax Inc – Used Car Dealers
CarMax, the nation's largest retailer of used cars, revolutionized the automotive retail industry by driving integrity, honesty and transparency in every interaction. The company offers a truly personalized experience with the option for customers to do as much, or as little, online and in-store as they want. CarMax also provides a variety of vehicle delivery methods, including home delivery, contactless curbside pickup and appointments in its stores. During the fiscal year ending February 29, 2020, CarMax sold more than 830,000 used cars and more than 465,000 wholesale vehicles at its in-store auctions. CarMax has 220 stores, over 25,000 Associates, and is proud to have been recognized for 16 consecutive years as one of the Fortune 100 Best Companies to Work ForĀ®.
Analysis Results
Intrinsic Value $4,548.83
Latest Price $92.46
Relative Value 98% undervalued
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Cash Flow (Billions)
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 55.9%.

Weighted Average Cost of Capital (WACC)

The calculated WACC is 5.0%. This value is used as the default discount rate.

Value of Future Flows

Assuming a growth rate of 55.9%, 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 (billion) Present value (billion)
2023 5.05 4.81
2024 7.87 7.14
2025 12.3 10.6
2026 19.1 15.8
2027 29.8 23.4
Terminal Value

Assuming the company was sold after the projection period at an exit multiple of 30, the terminal value of the company would be 894 billion. This corresponds to a present value of 669 billion.

Intrinsic Value Per Share

The total present value of the projected cash flows is 61.7 billion. Adding in the terminal value gives a total present value of 730 billion.

There are presently 161.0 million outstanding shares, so the intrinsic value per share is 4548.83.

Financial Statements

The following data was to determine the past cash flows.

Current Assets 21,838,991,000
Current Cash 102,716,000
Current Liabilities 16,967,172,000
Current Debt 11,203,000
Non-Cash Working Capital (NCWC) 4,780,306,000
Change in NCWC 2,292,135,000
EBIT 1,551,873,000
Tax Provision 341,049,000
Depreciation and Amortization 273,188,000
Capital Expenditure -308,534,000
Unlevered Free Cash Flow 3,454,009,168
Current Assets 17,606,615,000
Current Cash 132,319,000
Current Liabilities 14,996,052,000
Current Debt 9,927,000
Non-Cash Working Capital (NCWC) 2,488,171,000
Change in NCWC 21,784,000
EBIT 1,043,160,000
Tax Provision 218,338,000
Depreciation and Amortization 242,156,000
Capital Expenditure -164,536,000
Unlevered Free Cash Flow 906,604,594
Current Assets 17,215,398,000
Current Cash 58,211,000
Current Liabilities 14,700,091,000
Current Debt 9,291,000
Non-Cash Working Capital (NCWC) 2,466,387,000
Change in NCWC 296,329,000
EBIT 1,238,303,000
Tax Provision 272,553,000
Depreciation and Amortization 215,811,000
Capital Expenditure -331,896,000
Unlevered Free Cash Flow 1,127,843,065
Current Assets 15,642,500,000
Current Cash 46,938,000
Current Liabilities 13,438,799,000
Current Debt 13,295,000
Non-Cash Working Capital (NCWC) 2,170,058,000
Change in NCWC 48,336,000
EBIT 1,189,006,000
Tax Provision 270,393,000
Depreciation and Amortization 182,247,000
Capital Expenditure -304,636,000
Unlevered Free Cash Flow 826,044,691
Current Assets 14,597,148,000
Current Cash 44,525,000
Current Liabilities 12,441,022,000
Current Debt 10,121,000
Non-Cash Working Capital (NCWC) 2,121,722,000
Change in NCWC 173,897,000
EBIT 1,132,990,000
Tax Provision 399,496,000
Depreciation and Amortization 179,942,000
Capital Expenditure -296,816,000
Unlevered Free Cash Flow 764,456,805
Current Assets 13,469,706,000
Current Cash 38,416,000
Current Liabilities 11,493,018,000
Current Debt 9,553,000
Non-Cash Working Capital (NCWC) 1,947,825,000
Change in NCWC 193,980,000
EBIT 1,063,774,000
Tax Provision 379,435,000
Depreciation and Amortization 168,875,000
Capital Expenditure -418,144,000
Unlevered Free Cash Flow 607,420,728
Current Assets 12,008,673,000
Current Cash 37,394,000
Current Liabilities 10,232,193,000
Current Debt 14,759,000
Non-Cash Working Capital (NCWC) 1,753,845,000
Change in NCWC -75,791,000
EBIT 1,058,861,000
Tax Provision 386,516,000
Depreciation and Amortization 137,360,000
Capital Expenditure -315,584,000
Unlevered Free Cash Flow 399,608,958
Current Assets 11,034,542,000
Current Cash 27,606,000
Current Liabilities 9,209,639,000
Current Debt 32,339,000
Non-Cash Working Capital (NCWC) 1,829,636,000
Change in NCWC 547,427,000
EBIT 997,096,000
Tax Provision 371,973,000
Depreciation and Amortization 115,173,000
Capital Expenditure -309,817,000
Unlevered Free Cash Flow 967,251,403
Current Assets 9,791,072,000
Current Cash 627,901,000
Current Liabilities 7,900,003,000
Current Debt 19,041,000
Non-Cash Working Capital (NCWC) 1,282,209,000
Change in NCWC -134,622,000
EBIT 829,653,000
Tax Provision 304,736,000
Depreciation and Amortization 101,911,000
Capital Expenditure -310,317,000
Unlevered Free Cash Flow 169,532,110
Current Assets 8,206,049,000
Current Cash 449,364,000
Current Liabilities 6,356,348,000
Current Debt 16,494,000
Non-Cash Working Capital (NCWC) 1,416,831,000
Change in NCWC 187,208,000
EBIT 732,595,000
Tax Provision 267,067,000
Depreciation and Amortization 95,283,000
Capital Expenditure -235,707,000
Unlevered Free Cash Flow 500,414,617

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