KAR
OPENLANE, Inc.
$27.44
Platform & Compounding FCF
50%
Two-stage FCF DCF
Strong
·
Conviction
Undervalued
Trading 42.1% below fair value
You pay
$27.44
Bear
$32.63
Fair
$47.42
Bull
$61.91
Bear
$32.63
+18.9%
6% stage 1 growth, 11% discount
Fair
$47.42
+72.8%
10% stage 1 growth, 11% discount
Bull
$61.91
+125.6%
13% stage 1 growth, 11% discount
Key Value Driver
FCF growth rate (10% base case)
Terminal Value % of EV
39%
Implied Market Multiple
12.9x
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 $29.00 from 18 analysts, using a 25% weight on analyst consensus. That produces an estimated intrinsic value of $47.42 per share.
Warnings
Wall Street's average price target is $29.00 (from 18 analysts). Our estimate is 85% above 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