DCF Tool

LAD

Lithia Motors, Inc. – New Car Dealers
Lithia Motors, Inc. is one of the largest providers of personal transportation solutions in the United States and is among the fastest growing companies in the Fortune 500 (#265-2019). Lithia is a growth company powered by people and innovation. By purchasing and building strong businesses that have yet to realize their potential, Lithia generates significant cash flows while maintaining low leverage. Operational excellence is achieved by refocusing the business on the consumer experience and by utilizing proprietary performance measurements to increase market share and profitability. Lithia's unique growth model reinvests to expand its nationwide network and to fund innovations that create personal transportation solutions wherever, whenever and however consumers desire.
Analysis Results
Intrinsic Value $504.35
Latest Price $284.52
Relative Value 44% 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 6.7%.

Weighted Average Cost of Capital (WACC)

The calculated WACC is 7.0%. This value is used as the default discount rate.

Value of Future Flows

Assuming a growth rate of 6.7%, 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 658 614
2023 702 613
2024 749 611
2025 799 609
2026 852 607
Terminal Value

Assuming a growth rate after the projection years of 2.0%, the terminal value of the company would be 17300 million. This corresponds to a present value of 11500 million.

Intrinsic Value Per Share

The total present value of the projected cash flows is 3050 million. Adding in the terminal value gives a total present value of 14600 million.

There are presently 28.9 million outstanding shares, so the intrinsic value per share is 504.35.

Financial Statements

The following data was to determine the past cash flows.

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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