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CarMax Inc (NYSE:KMX)
Intrinsic Value: Projected FCF
$-36.88 (As of Today)

Since the intrinsic value calculations based on Discounted Cash Flow Intrinsic Value: DCF (FCF Based), or Discounted Earnings Intrinsic Value: DCF (Earnings Based) cannot be applied to companies without consistent revenue and earnings, GuruFocus developed a valuation model based on normalized Free Cash Flow and Book Value of the company. The details of how we calculate the intrinsic value of stocks are described in detail here.

As of today, CarMax Inc's projected FCF intrinsic value is $-36.88. The stock price of CarMax Inc is $53.59. Therefore, CarMax Inc's Price to Intrinsic Value: Projected FCF Ratio of today is 0.0.

During the past 13 years, the highest Price to Intrinsic Value: Projected FCF Ratio of CarMax Inc was 87.30. The lowest was 4.49. And the median was 9.80.


Definition

Since the intrinsic value calculations based on Discounted Cash Flow Intrinsic Value: DCF (FCF Based), or Discounted Earnings Intrinsic Value: DCF (Earnings Based) cannot be applied to companies without consistent revenue and earnings, GuruFocus developed a valuation model based on normalized Free Cash Flow and Book Value of the company.

The details of how we calculate the intrinsic value of stocks are described in detail here.

This method smooths out the free cash flow over the past 6-7 years, multiplies the results by a growth multiple, and adds a portion of total equity.

Value = ((Growth Multiple)*Free Cash Flow(6 year avg) + 0.8*Total Equity(most recent))/Shares Outstanding

In the case of negative total equity, the following formula is used (see the Total Equity section for the reason):

Value = ((Growth Multiple)*Free Cash Flow(6 year avg) + Total Equity(most recent)/0.8)/Shares Outstanding


Here CarMax Inc's FCF(6 year avg) is calculate as

CarMax Inc Quarterly Data

201311201402201405201408201411201502201505201508201511201602
total_freecashflow -306-217-263-309-452-25458-289-392158
201105201108201111201202201205201208201211201302201305201308
total_freecashflow -6-15056-135-163-227-294-330-120-280
201005201008201011201102
total_freecashflow 46-71-36-22

Add all the Free Cash Flow together and divide 6 will get CarMax Inc's FCF(6 year avg) = $-666.36.

CarMax Inc's Intrinsic Value: Projected FCF for today is calculated as

Intrinsic Value=(Growth Multiple*Free Cash Flow(6 year avg)+Total Equity(Feb16)*0.8)/Shares Outstanding
=(14.8626533105*-666.359+2904.786*0.8)/205.540
=-36.88

* All numbers are in millions except for per share data and ratio. All numbers are in their own currency.


Explanation

The growth multiple is capped between 8.35 and 17.74.

Total equity weighting is more art than science and it should always be revisited in more detail when researching a company. Weightings from 0% to 100% to more than 100% are possible. 80% was chosen as a happy medium after taking the above ideas into consideration. Learn more here.

CarMax Inc's Price to Intrinsic Value: Projected FCF Ratio for today is calculated as

Price to Intrinsic Value: Projected FCF=Share Price/Intrinsic Value: Projected FCF
=53.59/-36.8786318834
=

* All numbers are in millions except for per share data and ratio. All numbers are in their own currency.


Related Terms

Intrinsic Value: DCF (Earnings Based), Intrinsic Value: DCF (FCF Based), Free Cash Flow


Historical Data

* All numbers are in millions except for per share data and ratio. All numbers are in their own currency.

CarMax Inc Annual Data

Feb07Feb08Feb09Feb10Feb11Feb12Feb13Feb14Feb15Feb16
Projected FCF 1.65-1.092.104.206.096.240.44-6.87-28.16-36.88

CarMax Inc Quarterly Data

Nov13Feb14May14Aug14Nov14Feb15May15Aug15Nov15Feb16
Projected FCF -5.66-6.87-10.79-15.41-26.11-28.16-26.98-31.12-39.29-36.88
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