DCF Tool

MGRC

McGrath Rentcorp – General Warehousing and Storage
Founded in 1979, McGrath RentCorp is a diversified business-to-business rental company providing modular buildings, electronic test equipment, portable storage and tank containment solutions across the United States and other select North American regions. The Company's rental operations consist of four divisions: Mobile Modular rents and sells modular buildings to fulfill customers' temporary and permanent classroom and office space needs; TRS-RenTelco rents and sells electronic test equipment; Adler Tank Rentals rents and sells containment solutions for hazardous and nonhazardous liquids and solids; and Mobile Modular Portable Storage provides portable storage rental solutions.
Analysis Results
Intrinsic Value $228.87
Latest Price $90.48
Relative Value 60% 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 17.0%.

Weighted Average Cost of Capital (WACC)

The calculated WACC is 3.7%. This value is used as the default discount rate.

Value of Future Flows

Assuming a growth rate of 17.0%, 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)
2023 109 105
2024 127 118
2025 149 134
2026 174 151
2027 204 170
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 6110 million. This corresponds to a present value of 4920 million.

Intrinsic Value Per Share

The total present value of the projected cash flows is 677 million. Adding in the terminal value gives a total present value of 5600 million.

There are presently 24.5 million outstanding shares, so the intrinsic value per share is 228.87.

Financial Statements

The following data was to determine the past cash flows.

Current Assets 190,980,000
Current Cash 957,000
Current Liabilities 243,246,000
Current Debt 0
Non-Cash Working Capital (NCWC) -53,223,000
Change in NCWC -17,693,000
EBIT 165,566,000
Tax Provision 34,882,000
Depreciation and Amortization 111,344,000
Capital Expenditure -205,306,000
Unlevered Free Cash Flow 15,414,311
Current Assets 160,990,000
Current Cash 1,491,000
Current Liabilities 195,029,000
Current Debt 0
Non-Cash Working Capital (NCWC) -35,530,000
Change in NCWC -4,537,000
EBIT 132,421,000
Tax Provision 32,051,000
Depreciation and Amortization 106,695,000
Capital Expenditure -116,825,000
Unlevered Free Cash Flow 82,895,549
Current Assets 124,554,000
Current Cash 1,238,000
Current Liabilities 154,309,000
Current Debt 0
Non-Cash Working Capital (NCWC) -30,993,000
Change in NCWC 5,046,000
EBIT 140,753,000
Tax Provision 30,060,000
Depreciation and Amortization 94,643,000
Capital Expenditure -100,053,000
Unlevered Free Cash Flow 108,346,384
Current Assets 130,441,000
Current Cash 2,342,000
Current Liabilities 164,138,000
Current Debt 0
Non-Cash Working Capital (NCWC) -36,039,000
Change in NCWC -16,502,000
EBIT 141,372,000
Tax Provision 32,319,000
Depreciation and Amortization 89,476,000
Capital Expenditure -179,783,000
Unlevered Free Cash Flow -821,330
Current Assets 122,524,000
Current Cash 1,508,000
Current Liabilities 140,553,000
Current Debt 0
Non-Cash Working Capital (NCWC) -19,537,000
Change in NCWC 218,000
EBIT 117,481,000
Tax Provision 25,289,000
Depreciation and Amortization 81,975,000
Capital Expenditure -138,735,000
Unlevered Free Cash Flow 32,561,551
Current Assets 108,373,000
Current Cash 2,501,000
Current Liabilities 125,627,000
Current Debt 0
Non-Cash Working Capital (NCWC) -19,755,000
Change in NCWC -928,000
EBIT 94,740,000
Tax Provision -70,468,000
Depreciation and Amortization 78,416,000
Capital Expenditure -109,196,000
Unlevered Free Cash Flow 63,032,000
Current Assets 97,729,000
Current Cash 852,000
Current Liabilities 115,704,000
Current Debt 0
Non-Cash Working Capital (NCWC) -18,827,000
Change in NCWC -16,860,000
EBIT 79,259,000
Tax Provision 28,680,000
Depreciation and Amortization 81,179,000
Capital Expenditure -89,586,000
Unlevered Free Cash Flow 20,029,439
Current Assets 107,366,000
Current Cash 1,103,000
Current Liabilities 108,230,000
Current Debt 0
Non-Cash Working Capital (NCWC) -1,967,000
Change in NCWC -2,765,000
EBIT 76,957,000
Tax Provision 25,907,000
Depreciation and Amortization 84,280,000
Capital Expenditure -140,358,000
Unlevered Free Cash Flow -11,922,383
Current Assets 102,461,000
Current Cash 1,167,000
Current Liabilities 100,496,000
Current Debt 0
Non-Cash Working Capital (NCWC) 798,000
Change in NCWC 469,000
EBIT 85,360,000
Tax Provision 30,852,000
Depreciation and Amortization 81,125,000
Capital Expenditure -164,937,000
Unlevered Free Cash Flow -32,380,757
Current Assets 89,280,000
Current Cash 1,630,000
Current Liabilities 87,321,000
Current Debt 0
Non-Cash Working Capital (NCWC) 329,000
Change in NCWC -12,783,000
EBIT 80,061,000
Tax Provision 27,977,000
Depreciation and Amortization 76,849,000
Capital Expenditure -144,584,000
Unlevered Free Cash Flow -31,839,108
Current Assets 93,868,000
Current Cash 1,612,000
Current Liabilities 79,144,000
Current Debt 0
Non-Cash Working Capital (NCWC) 13,112,000
Change in NCWC 4,362,000
EBIT 82,016,000
Tax Provision 28,090,000
Depreciation and Amortization 72,476,000
Capital Expenditure -145,966,000
Unlevered Free Cash Flow -18,728,910

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