LAD Intrinsic Value

LAD

Lithia Motors, Inc. – New Car Dealers

at lithia our success is driven by a passion for cars and for serving our customers. lithia auto stores is one of the largest and most trusted automotive retailers in the u.s., providing outstanding sales, service, parts, and auto financing to urban and rural customers in 14 states. lithia’s road to success has taken us from a single dealership in ashland, oregon to a publicly traded company with approximately 130 locations. join an auto retailer that believes our growth relies on the growth of our people. members of team lithia get the tools they need to succeed, including ongoing training in a promote-from-within culture. our early beginnings were the road map leading us to a present day. a journey filled with healthy challenges and exciting opportunities. we’re a company that believes in our core values and living them through personal ownership, an entrepreneurial spirit, high standards and best practices, while thriving in a dynamic work place. come “take the journey with us

Analysis Results

Intrinsic Value	$1,664.35
Latest Price	$290.30
Relative Value	83% undervalued

Share results:

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Cash Flow (Billions)

Analysis Parameters

New Ticker

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 15.9%.

Weighted Average Cost of Capital (WACC)

The calculated WACC is 5.9%. This value is used as the default discount rate.

Value of Future Flows

Assuming a growth rate of 15.9%, 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	1.18	1.11
2024	1.37	1.22
2025	1.58	1.33
2026	1.83	1.46
2027	2.13	1.59

Terminal Value

Assuming a growth rate after the projection years of 2.0%, the terminal value of the company would be 55.4 billion. This corresponds to a present value of 39.2 billion.

Intrinsic Value Per Share

The total present value of the projected cash flows is 6.71 billion. Adding in the terminal value gives a total present value of 45.9 billion.

There are presently 27.6 million outstanding shares, so the intrinsic value per share is 1664.35.

Financial Statements

The following data was to determine the past cash flows.

Current Assets	4,630,900,000
Current Cash	246,700,000
Current Liabilities	3,178,200,000
Current Debt	2,137,100,000
Non-Cash Working Capital (NCWC)	3,343,100,000
Change in NCWC	973,600,000
EBIT	1,941,100,000
Tax Provision	468,400,000
Depreciation and Amortization	228,100,000
Capital Expenditure	-303,100,000
Unlevered Free Cash Flow	2,314,144,369

Current Assets	3,533,300,000
Current Cash	174,800,000
Current Liabilities	2,402,800,000
Current Debt	1,413,800,000
Non-Cash Working Capital (NCWC)	2,369,500,000
Change in NCWC	-191,400,000
EBIT	1,669,800,000
Tax Provision	422,100,000
Depreciation and Amortization	166,300,000
Capital Expenditure	-260,400,000
Unlevered Free Cash Flow	909,608,068

Current Assets	3,337,600,000
Current Cash	160,200,000
Current Liabilities	2,479,700,000
Current Debt	1,863,200,000
Non-Cash Working Capital (NCWC)	2,560,900,000
Change in NCWC	36,600,000
EBIT	705,000,000
Tax Provision	178,200,000
Depreciation and Amortization	92,400,000
Capital Expenditure	-167,800,000
Unlevered Free Cash Flow	472,474,479

Current Assets	3,070,500,000
Current Cash	84,000,000
Current Liabilities	2,569,100,000
Current Debt	2,106,900,000
Non-Cash Working Capital (NCWC)	2,524,300,000
Change in NCWC	-25,600,000
EBIT	497,600,000
Tax Provision	103,900,000
Depreciation and Amortization	82,400,000
Capital Expenditure	-124,900,000
Unlevered Free Cash Flow	291,778,529

Current Assets	2,991,400,000
Current Cash	31,600,000
Current Liabilities	2,493,500,000
Current Debt	2,083,600,000
Non-Cash Working Capital (NCWC)	2,549,900,000
Change in NCWC	187,450,000
EBIT	448,300,000
Tax Provision	71,800,000
Depreciation and Amortization	75,400,000
Capital Expenditure	-158,000,000
Unlevered Free Cash Flow	457,778,325

Current Assets	2,782,782,000
Current Cash	57,253,000
Current Liabilities	2,300,981,000
Current Debt	1,937,902,000
Non-Cash Working Capital (NCWC)	2,362,450,000
Change in NCWC	425,070,000
EBIT	408,986,000
Tax Provision	101,852,000
Depreciation and Amortization	57,722,000
Capital Expenditure	-105,378,000
Unlevered Free Cash Flow	666,377,635

Current Assets	2,287,194,000
Current Cash	50,282,000
Current Liabilities	1,921,994,000
Current Debt	1,622,462,000
Non-Cash Working Capital (NCWC)	1,937,380,000
Change in NCWC	341,502,000
EBIT	352,356,000
Tax Provision	86,465,000
Depreciation and Amortization	49,369,000
Capital Expenditure	-100,761,000
Unlevered Free Cash Flow	535,009,245

Current Assets	1,878,865,000
Current Cash	45,008,000
Current Liabilities	1,590,825,000
Current Debt	1,352,846,000
Non-Cash Working Capital (NCWC)	1,595,878,000
Change in NCWC	242,276,000
EBIT	322,859,000
Tax Provision	79,705,000
Depreciation and Amortization	41,600,000
Capital Expenditure	-83,244,000
Unlevered Free Cash Flow	425,534,834

Current Assets	1,615,509,000
Current Cash	29,898,000
Current Liabilities	1,442,600,000
Current Debt	1,210,591,000
Non-Cash Working Capital (NCWC)	1,353,602,000
Change in NCWC	447,312,000
EBIT	233,752,000
Tax Provision	74,955,000
Depreciation and Amortization	26,363,000
Capital Expenditure	-85,983,000
Unlevered Free Cash Flow	538,207,433

Current Assets	1,081,549,000
Current Cash	23,686,000
Current Liabilities	872,511,000
Current Debt	720,938,000
Non-Cash Working Capital (NCWC)	906,290,000
Change in NCWC	147,458,000
EBIT	183,718,000
Tax Provision	60,574,000
Depreciation and Amortization	20,035,000
Capital Expenditure	-50,025,000
Unlevered Free Cash Flow	234,060,911

Current Assets	933,209,000
Current Cash	42,839,000
Current Liabilities	721,304,000
Current Debt	589,766,000
Non-Cash Working Capital (NCWC)	758,832,000
Change in NCWC	235,915,000
EBIT	148,484,000
Tax Provision	49,062,000
Depreciation and Amortization	17,314,000
Capital Expenditure	-64,584,000
Unlevered Free Cash Flow	280,418,022

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