CVNA
Carvana Co.
$63.76
Platform & Compounding FCF
85%
Two-stage FCF DCF
Strong
·
Conviction
Overvalued
Trading 58.3% above fair value
You pay
$65.12
Bear
$22.66
Fair
$41.14
Bull
$62.98
Bear
$22.66
-65.2%
11% stage 1 growth, 12% discount
Fair
$41.14
-36.8%
18% stage 1 growth, 12% discount
Bull
$62.98
-3.3%
23% stage 1 growth, 12% discount
Key Value Driver
FCF growth rate (18% base case)
Terminal Value % of EV
40%
Implied Market Multiple
90.7x
Market is pricing in (growth)
31.5%
vs 17.7% base
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 $85.45 from 46 analysts, using a 30% weight on analyst consensus. That produces an estimated intrinsic value of $41.14 per share.
Warnings
Wall Street's average price target is $85.45 (from 46 analysts). Our estimate is 74% 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