KAR
KAR Auction Services, Inc. (KAR)
Last Price$20.8(3.1%)
Market Cap$2,325.1M
DCF value
$13.9
Overvalued (DCF value)
(33.2%)
Discount Rate
8.5%
Long-Term Growth Rate
2.5%
Stock quality
6/10
Good

KAR DCF Model

Free Cash Flow to Firm Model
NOPAT Model
Free Cash Flow to Equity Model
Net Income Model
Millions
Billions
Dec'20 ActualDec'21 ActualDec'22 ActualDec'23 ActualDec'24 ActualDec'25 EstimateDec'26 EstimateDec'27 EstimateDec'28 EstimateDec'29 EstimateDec'30 EstimateDec'31 EstimateDec'32 EstimateDec'33 EstimateDec'34 EstimateDec'35 Terminal
% growth
2,187.7
(21.4%)
2,251.6
2.9%
1,519.4
(32.5%)
1,645.1
8.3%
1,788.5
8.7%
1,797.5
0.5%
1,921.1
6.9%
2,043.9
6.4%
2,164.6
5.9%
2,281.9
5.4%
2,394.4
4.9%
2,500.9
4.4%
2,599.9
4.0%
2,690.2
3.5%
2,770.5
3.0%
2,839.8
2.5%
136.4
6.2%
210.6
9.4%
173.7
11.4%
(5.2)
(0.3%)
182.2
10.2%
117.9
6.6%
126.0
6.6%
134.1
6.6%
142.0
6.6%
149.7
6.6%
157.1
6.6%
164.1
6.6%
170.6
6.6%
176.5
6.6%
181.7
6.6%
186.3
6.6%
NOPAT
% effective tax rate
12.6
0.6%
138.0
6.1%
128.7
8.5%
(5.5)
(0.3%)
126.8
7.1%
82.1
4.6%
87.7
4.6%
93.3
4.6%
98.8
4.6%
104.2
4.6%
109.3
4.6%
114.2
4.6%
118.7
4.6%
122.8
4.6%
126.5
4.6%
129.7
4.6%
% of revenue
191.3
8.7%
109.9
4.9%
100.2
6.6%
101.5
6.2%
95.2
5.3%
108.4
6.0%
115.8
6.0%
123.2
6.0%
130.5
6.0%
137.6
6.0%
144.4
6.0%
150.8
6.0%
156.8
6.0%
162.2
6.0%
167.0
6.0%
171.2
6.0%
% of revenue
(101.4)
(4.6%)
(108.5)
(4.8%)
(60.9)
(4.0%)
(52.0)
(3.2%)
(53.0)
(3.0%)
(60.7)
(3.4%)
(64.9)
(3.4%)
(69.0)
(3.4%)
(73.1)
(3.4%)
(77.1)
(3.4%)
(80.9)
(3.4%)
(84.5)
(3.4%)
(87.8)
(3.4%)
(90.9)
(3.4%)
(93.6)
(3.4%)
(95.9)
(3.4%)
90.8
4.2%
98.4
4.4%
(127.4)
(8.4%)
(28.8)
(1.8%)
39.8
2.2%
(47.4)
(2.6%)
(50.7)
(2.6%)
(53.9)
(2.6%)
(57.1)
(2.6%)
(60.2)
(2.6%)
(63.1)
(2.6%)
(65.9)
(2.6%)
(68.6)
(2.6%)
(70.9)
(2.6%)
(73.1)
(2.6%)
(74.9)
(2.6%)
Free Cash Flow to Firm (FCFF)
% of revenue
193.3
8.8%
237.8
10.6%
40.6
2.7%
15.2
0.9%
208.8
11.7%
82.3
4.6%
88.0
4.6%
93.6
4.6%
99.2
4.6%
104.5
4.6%
109.7
4.6%
114.6
4.6%
119.1
4.6%
123.2
4.6%
126.9
4.6%
130.1
4.6%
% of FCFF used in calculation
80.8%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
Discount period
0.50
1.50
2.50
3.50
4.50
5.50
6.50
7.50
8.50
9.50
Discount factor
0.96
0.89
0.82
0.75
0.69
0.64
0.59
0.54
0.50
0.46
Discounted FCFF (DFCFF)
63.9
77.9
76.4
74.6
72.5
70.1
67.5
64.7
61.7
58.6

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KAR DCF Value

DCF Value Calculation

as of Mar 11, 2025
Sum of DFCFF
% share of EV
688.0M
40.6%
Terminal Value (TV)
2,178.1M
Discounted TV
% share of EV
1,005.9M
59.4%
Total Debt
282.9M
1,554.0M
Shares outstanding
112.1M
FX rate
1.0
33.2% overvalued

Equity Value Bridge

KAR DCF Financials

Revenue
$1,788.5M -> $2,770.5M 4.5% CAGR
Operating Income
$182.2M -> $181.7M (0.0%) CAGR
FCFF
$208.8M -> $126.9M (4.9%) CAGR

KAR DCF sensitivity

DCF value
Long-term Terminal growth rate
1.5%
2.0%
2.5%
3.0%
3.5%
WACC
7.0%
$16.0
$18.0
$19.0
$21.0
$21.0
7.5%
$15.0
$16.0
$17.0
$18.0
$20.0
8.5%
$13.0
$13.0
$14.0
$15.0
$16.0
8.5%
$13.0
$13.0
$14.0
$15.0
$16.0
9.0%
$12.0
$12.0
$13.0
$13.0
$14.0
DCF value, undervalued / overvalued
Long-term Terminal growth rate
1.5%
2.0%
2.5%
3.0%
3.5%
WACC
7.0%
(23.0%)
(13.0%)
(8.0%)
1.0%
1.0%
7.5%
(28.0%)
(23.0%)
(18.0%)
(13.0%)
(4.0%)
8.5%
(37.0%)
(37.0%)
(33.0%)
(28.0%)
(23.0%)
8.5%
(37.0%)
(37.0%)
(33.0%)
(28.0%)
(23.0%)
9.0%
(42.0%)
(42.0%)
(37.0%)
(37.0%)
(33.0%)

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FAQ

What is KAR Auction Services, Inc. DCF (discounted cash flow) valuation?

As of Mar 11, 2025, KAR Auction Services, Inc.'s Discounted Cash Flow (DCF) valuation estimates its share price at $13.9. This suggests it may be overvalued by (33.2%) compared to its current price of around $20.8, using a WACC of 8.5% and growth rates of 2.5%.

What is KAR Auction Services, Inc. WACC?

As of Mar 11, 2025, KAR Auction Services, Inc.'s Weighted Average Cost of Capital (WACC) is approximately 8.5%.

What is KAR Auction Services, Inc. Enterprise Value?

As of Mar 11, 2025, KAR Auction Services, Inc.'s Enterprise Value (EV) is approximately $1,693.9M. This value reflects the company's total market capitalization plus debt, minus cash and cash equivalents, providing a comprehensive measure of its overall value in the market.