CVNA
Carvana Co.
$66.55
Platform & Compounding FCF
85%
Two-stage FCF DCF
Strong
·
Conviction
Undervalued
Trading 41.3% below fair value
You pay
$66.55
Bear
$70.28
Fair
$113.41
Bull
$164.40
Bear
$70.28
+5.6%
11% stage 1 growth, 12% discount
Fair
$113.41
+70.4%
18% stage 1 growth, 12% discount
Bull
$164.40
+147.0%
23% stage 1 growth, 12% discount
Key Value Driver
FCF growth rate (18% base case)
Terminal Value % of EV
40%
Implied Market Multiple
87.3x
Summary
Our base-case estimate uses a two-stage discounted cash flow model based on free cash flow. We then blend that result with the average analyst price target of $317.00 from 45 analysts, using a 30% weight on analyst consensus. That produces an estimated intrinsic value of $113.41 per share.
Warnings
Wall Street's average price target is $317.00 (from 45 analysts). Our estimate is 92% below the consensus -- consider that gap carefully.
Key Risks
- P/E alone misleads — earnings depressed by growth investment
- Cyclical or commodity businesses may be misclassified as platforms
- Terminal value dominance suggests sensitivity to long-run assumptions