Corpay, Inc.CPAYNYSE

Overview Intelligence Charts News Fundamentals Key Metrics TTM Financials Earnings Growth Rating Analysts Institutional Peers Historical

DCF Valuation

DCF Valuation Summary

Strong Buy

Fair Value: $918.39 per share(market-calibrated)

+176.6%

Upside to Fair Value

Current

$332.01

Pure Model

$1,063.22

Fair Value

$918.39

Bull Case

$1,428.24

Bear Case

$742.88

Market Reality Check

Model Terminal Growth

3.75%

Market-Implied Growth

0.50%

Calibrated Growth

2.61%

Fair value uses 65% model / 35% market-implied terminal growth. Pure model: $1,063.22.

What's Driving This Ratingfor CPAY

✓

CapEx already efficient

CapEx at 3.50% of revenue is already at or below sector maintenance level. No normalization needed — cash conversion is already strong.

✓

Premium margins already priced in

EBIT margin of 44.01% is already well above sector average. The model holds this level — there's limited room for margin expansion to drive upside. Valuation depends primarily on revenue growth.

⚠

Analyst growth decelerates sharply

Revenue growth drops from 16.61% in Year 1 to 3.75% by Year 5 (per analyst consensus). This growth deceleration is a key reason the model may undervalue the stock if growth re-accelerates.

🎯

Market pricing in lower growth than model

The market implies only 0.50% perpetual growth — 325bps below the model's 3.75%. This suggests the market sees headwinds or risks not in the model.

✓

Strong cash flow conversion

Year 10 FCF/EBITDA conversion of 65.68% indicates efficient cash generation. FCF reaches $2.9B by Year 10 (33.80% FCF margin).

Weighted Average Cost of Capital (WACC)

Cost of Equity (CAPM)

Risk-Free Rate (Rf)4.50%

Beta (β)0.81

Market Risk Premium4.50%

*Using current implied premium (4.5% per Damodaran 2026), not historical (6.5%)

Cost of Equity (Re)8.14%

Cost of Debt

Pre-tax Cost of Debt2.83%

Tax Rate30.00%

After-tax Cost of Debt1.98%

Equity Weight (E/V)69.95%

Debt Weight (D/V)30.05%

WACC Calculation

WACC = (E/V × Re) + (D/V × Rd × (1-Tc))

WACC = (69.95% × 8.14%) + (30.05% × 1.98%)

= 6.29%

10-Year Free Cash Flow Projections(showing years 1, 3, 5, 7, 10)

Year	Year 1	Year 3	Year 5	Year 7	Year 10
Revenue	$5.3B	$6.4B	$7.1B	$7.6B	$8.5B
EBIT	$2.3B	$2.8B	$3.1B	$3.4B	$3.7B
Tax	$697M	$845M	$936M	$1.0B	$1.1B
NOPAT	$1.6B	$2.0B	$2.2B	$2.4B	$2.6B
+ Depreciation	$394M	$477M	$528M	$569M	$635M
- Capex	$185M	$224M	$248M	$267M	$298M
- Δ NWC	$199M	$152M	$68M	$73M	$82M
Free Cash Flow	$1.6B	$2.1B	$2.4B	$2.6B	$2.9B
Discount Factor	0.941	0.833	0.737	0.653	0.544
Present Value	$1.5B	$1.7B	$1.8B	$1.7B	$1.6B

FCF Formula: Free Cash Flow = NOPAT + Depreciation - Capex - Change in Net Working Capital

Terminal Value Calculation

Perpetuity Growth Method

Year 10 FCF$2.9B

Terminal Growth Rate3.75%

WACC6.29%

TV = FCF₁₀ × (1+g) / (WACC-g)

Terminal Value$117.8B

PV of Terminal Value$64.0B

Exit Multiple Method

Year 10 EBITDA$4.4B

Exit Multiple (EV/EBITDA)28.0x

TV = EBITDA₁₀ × Exit Multiple

Terminal Value$122.8B

PV of Terminal Value$66.7B

Valuation Summary

Perpetuity Growth Method

PV of Projected FCFs$16.7B

PV of Terminal Value$64.0B

Enterprise Value$80.7B

(-) Net Debt$7.5B

Equity Value$73.2B

Shares Outstanding70M

Price per Share$1,044.01

Exit Multiple Method

PV of Projected FCFs$16.7B

PV of Terminal Value$66.7B

Enterprise Value$83.4B

(-) Net Debt$7.5B

Equity Value$75.9B

Shares Outstanding70M

Price per Share$1,082.43

Pure Model Fair Value

$1,063.22

Average of perpetuity growth and exit multiple methods (before market calibration)

Sensitivity AnalysisPrice per Share

WACC ↓ / Growth →	2.75%	3.25%	3.75%	4.25%	4.75%
4.29%	$1,364.37	$1,304.26	$1,247.00	$1,192.43	$1,140.40
5.29%	$1,163.54	$1,288.59	$1,247.00	$1,192.43	$1,140.40
6.29%	$930.95	$986.19	$1,063.22	$1,178.07	$1,140.40
7.29%	$782.52	$812.30	$850.50	$901.28	$972.07
8.29%	$674.87	$692.86	$714.81	$742.20	$777.34

How to read: This table shows how the valuation changes with different WACC (discount rate) and terminal growth rate assumptions. Green = undervalued, Red = overvalued.

Scenario Analysis

Bear Case

$742.88

123.8% vs current

• -25% vs analyst consensus
• Terminal growth: 3.3%
• Beta: 1.01

Base Case

$1,063.22

220.2% vs current

• Analyst consensus
• Terminal growth: 3.8%
• Beta: 0.81

Bull Case

$1,428.24

330.2% vs current

• +25% vs analyst consensus
• Terminal growth: 4.3%
• Beta: 0.69

Key Assumptions & Drivers• Technology Sector

Growth Assumptions (Select Years)

Year 1 Revenue Growth16.61%

Year 3 Revenue Growth9.84%

Year 5 Revenue Growth3.75%

Year 7 Revenue Growth3.75%

Year 10 Revenue Growth3.75%

Terminal Growth Rate3.75%

Margin & Efficiency

Current EBIT Margin44.01%

Tax Rate30.00%

Historical Capex / Rev3.50%

NWC / Revenue26.50%

Key Drivers: Revenue growth, operating margin expansion, capex efficiency, and working capital management are the primary drivers of cash flow generation. Terminal value assumptions significantly impact final valuation.

Institutional-Grade Methodology

Actual Company Data: Revenue, EBIT, Capex, NWC, Tax Rate, Interest Expense, Beta

Market Assumptions: Risk-free: 4.5% (10Y), MRP: 4.5% (Damodaran 2026), Exit: 28x EV/EBITDA (Technology sector)

This DCF model is for informational purposes only. Projections are based on assumptions that may not materialize. Past performance does not guarantee future results. Consult a financial advisor before making investment decisions.

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