Published on 22 Apr 2024 on Simply Wall St. via Yahoo Finance
Is There An Opportunity With Auto Trader Group plc's (LON:AUTO) 24% Undervaluation?
Key Insights
The projected fair value for Auto Trader Group is UK£8.80 based on 2 Stage Free Cash Flow to EquityAuto Trader Group is estimated to be 24% undervalued based on current share price of UK£6.69 Analyst price target for AUTO is UK£7.42 which is 16% below our fair value estimate
Today we'll do a simple run through of a valuation method used to estimate the attractiveness of Auto Trader Group plc (LON:AUTO) as an investment opportunity by taking the expected future cash flows and discounting them to today's value. One way to achieve this is by employing the Discounted Cash Flow (DCF) model. Don't get put off by the jargon, the math behind it is actually quite straightforward.