Enterprise Value to FCFF (EV/FCFF)
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- Statement of Comprehensive Income
- Common-Size Balance Sheet: Assets
- Analysis of Long-term (Investment) Activity Ratios
- Common Stock Valuation Ratios
- Present Value of Free Cash Flow to Equity (FCFE)
- Selected Financial Data since 2005
- Operating Profit Margin since 2005
- Return on Equity (ROE) since 2005
- Return on Assets (ROA) since 2005
- Analysis of Revenues
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Free Cash Flow to The Firm (FCFF)
CoStar Group Inc., FCFF calculation
US$ in thousands
Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).
- Operating Cash Flow
- The net cash provided by operating activities demonstrated an upward trend from 2018 through 2020, increasing from $335,458 thousand to $486,106 thousand. However, in 2021, a slight decline to $469,731 thousand was observed, followed by a modest recovery in 2022 to $478,620 thousand. Overall, the operating cash flow displayed robust growth over the five-year period, with minor fluctuations in the last two years.
- Free Cash Flow to the Firm (FCFF)
- Free cash flow to the firm increased substantially from $307,019 thousand in 2018 to $442,745 thousand in 2020, indicating strong cash generation ability beyond operating needs. Similar to operating cash flow, a dip was noted in 2021, with FCFF decreasing to $427,943 thousand. In 2022, the FCFF saw a significant rebound, rising to $472,888 thousand, surpassing previous years except for 2020. This pattern suggests effective management of capital expenditures and working capital adjustments over the period.
- General Observations
- Both net cash provided by operating activities and free cash flow to the firm exhibited consistent growth over the analyzed years, reflecting stable operational performance and healthy liquidity positions. The decline observed in 2021 may point to temporary operational challenges or increased investments but was not sustained, as evidenced by the recovery in 2022. The alignment between operating cash flow and FCFF trends indicates controlled capital spending relative to cash generated from operations.
Interest Paid, Net of Tax
CoStar Group Inc., interest paid, net of tax calculation
US$ in thousands
Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).
2 2022 Calculation
Interest paid, tax = Interest paid × EITR
= × =
- Effective Income Tax Rate (EITR)
- The effective income tax rate exhibited variability over the examined period. Starting at 16.08% in 2018, the rate increased to 19.44% in 2019, followed by a decline to 16.18% in 2020. Subsequently, there was a notable rise to 27.58% in 2021, with a slight decrease to 24.05% in 2022. This pattern indicates fluctuations in tax obligations relative to earnings before taxes, with the most significant increase occurring between 2020 and 2021.
- Interest Paid, Net of Tax (in thousands of US$)
- Interest expenses, net of tax, demonstrated an upward trend throughout the period. The amount increased from $1,193 thousand in 2018 to $1,610 thousand in 2019. A sharper rise was observed in 2020, reaching $4,986 thousand. The escalation continued more dramatically in 2021, climbing to $22,820 thousand, and remaining relatively stable at $22,745 thousand in 2022. The substantial increase starting from 2020 suggests growing debt levels or higher interest rates impacting the company's financing costs.
Enterprise Value to FCFF Ratio, Current
CoStar Group Inc., current EV/FCFF calculation, comparison to benchmarks
| Selected Financial Data (US$ in thousands) | |
| Enterprise value (EV) | |
| Free cash flow to the firm (FCFF) | |
| Valuation Ratio | |
| EV/FCFF | |
| Benchmarks | |
| EV/FCFF, Industry | |
| Industrials | |
Based on: 10-K (reporting date: 2022-12-31).
If the company EV/FCFF is lower then the EV/FCFF of benchmark then company is relatively undervalued.
Otherwise, if the company EV/FCFF is higher then the EV/FCFF of benchmark then company is relatively overvalued.
Enterprise Value to FCFF Ratio, Historical
CoStar Group Inc., historical EV/FCFF calculation, comparison to benchmarks
Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).
- Enterprise Value (EV)
- The enterprise value showed an overall increasing trend from 2018 to 2022, with notable fluctuations. Starting at approximately 15.58 billion USD in 2018, EV rose significantly to around 23.93 billion USD in 2019 and further increased to approximately 30.19 billion USD in 2020. However, in 2021, EV experienced a marked decline to about 18.29 billion USD before rebounding to roughly 25.36 billion USD in 2022.
- Free Cash Flow to the Firm (FCFF)
- Free cash flow to the firm exhibited steady growth over the period. Beginning at approximately 307 million USD in 2018, FCFF increased in each subsequent year, reaching around 472.9 million USD in 2022. This indicates an improving cash-generating capability by the firm over time.
- EV/FCFF Ratio
- The EV to FCFF ratio demonstrated variability with no consistent directional trend. It started at 50.73 in 2018 and increased to 57.92 in 2019, followed by a further rise to 68.18 in 2020, indicating a growing valuation multiple relative to cash flow. In 2021, the ratio dropped sharply to 42.75, coinciding with the substantial decrease in EV. In 2022, the ratio increased again to 53.63, reflecting the partial recovery in enterprise value alongside continued FCFF growth.
- Insights
- The data reveals a company experiencing fluctuating valuation levels over the five-year period, with enterprise value affected more dramatically than free cash flow. The improvement in FCFF suggests solid operational cash performance, whereas the volatility in EV and the EV/FCFF ratio may indicate external market perceptions, strategic changes, or other factors influencing valuation independent of cash flow trends.