Using an unlevered Free Cash Flow to Firm (FCFF) model, we project Carvana Co.'s cash flows over 5 years with line-by-line expense modeling. Revenue is projected revenue growing from 31.5% to 15.3% annually, with expenses (COGS, SG&A, R&D) held at historical ratios. Depreciation is computed from a vintage matrix based on a 5-year useful life. Working capital is modeled using historical turnover days (DSO 7, DPO 7, DIO 63). At a 8.7% WACC with mid-year discounting, the terminal value (128% of enterprise value) is derived by applying the industry peer median EV/EBITDA multiple of 22.4x to Year 6 EBITDA. After subtracting net debt, the equity value implies a fair price of $73.85 per share, suggesting CVNA is overvalued by 75.4% at the current price of $300.60.
Adjust parameters to explore scenarios. Changes are for exploration only and do not affect saved valuations.
| 2026 | 2027 | 2028 | 2029 | 2030 | Terminal | |
|---|---|---|---|---|---|---|
| Profit Before Tax | -648 | -798 | -969 | -1,115 | -1,286 | -1,318 |
| (−) Net Interest | 965 | 1,189 | 1,443 | 1,660 | 1,915 | 1,962 |
| (+) D&A | 279 | 278 | 311 | 458 | 629 | 645 |
| EBITDA | 596 | 668 | 785 | 1,003 | 1,258 | 1,290 |
| (−) Tax | 0 | 0 | 0 | 0 | 0 | — |
| (−) CapEx | 551 | 678 | 823 | 948 | 1,093 | — |
| (−) ΔWC | 1,320 | 919 | 1,046 | 896 | 1,046 | — |
| Free Cash Flow (FCF) | -1,275 | -929 | -1,085 | -840 | -880 | — |
| Peers' EBITDA Multiple | 22.4x | |||||
| Terminal Value | 28,823 | |||||
| WACC / Discount Rate | 8.66% | |||||
| Timing of FCF (mid year) | 0.5 | 1.5 | 2.5 | 3.5 | 4.5 | 5 |
| Present Value of FCF | -1,223 | -820 | -882 | -628 | -606 | 19,030 |
| Enterprise Value | 14,871 | |||||
| Projection Period | -4,159 | -28.0% | ||||
| Terminal Value | 19,030 | 128.0% | ||||
| (−) Current Net Debt | (1,694) | |||||
| Equity Value | 16,565 | |||||
| (÷) Outstanding Shares | 224M | |||||
| Fair Price | $74 | -75.4% | ||||
| WACC \ EV/EBITDA Exit Multiple | 18.3x | 20.3x | 22.3x | 24.3x | 26.3x |
|---|---|---|---|---|---|
| 6.7% | $65 | $73 | $81 | $90 | $98 |
| 7.7% | $62 | $70 | $77 | $85 | $93 |
| 8.7% | $59 | $66 | $74 | $81 | $89 |
| 9.7% | $56 | $63 | $70 | $78 | $85 |
| 10.7% | $53 | $60 | $67 | $74 | $81 |
Current price: $300.60. Green = undervalued, Red = overvalued.
Based on default parameters
This is an unlevered Free Cash Flow to Firm (FCFF) model with a 5-year projection period. Revenue, expenses, D&A, and working capital are projected using the same line-by-line approach as the Growth Exit models. The key difference is the terminal value methodology: instead of assuming perpetual cash flow growth, the terminal value is calculated by applying the industry peer median EV/EBITDA multiple to the projected Year 6 EBITDA.
Using a peer exit multiple anchors the terminal value to how the market currently prices comparable companies, rather than relying on a theoretical perpetual growth assumption. This approach captures relative valuation dynamics and is particularly useful when a company is expected to converge toward industry-average profitability over time. The sensitivity matrix shows how fair value changes across different WACC and EV/EBITDA multiple scenarios.