As of May 22, 2025, Avalara Inc has a Discounted Cash Flow (DCF) derived fair value of $0.00 per share. With the current market price at $93.48, this represents a potential upside of -926.1%.
| Key Metrics | Value |
|---|---|
| DCF Fair Value (5-year) | $0.00 |
| DCF Fair Value (10-year) | $0.00 |
| Potential Upside (5-year) | -741.9% |
| Potential Upside (10-year) | -926.1% |
| Discount Rate (WACC) | 8.5% - 10.2% |
Revenue is projected to grow from $699 million in 12-2021 to $3316 million by 12-2031, representing a compound annual growth rate of approximately 16.8%.
| Fiscal Year | Revenue (USD millions) | Growth |
|---|---|---|
| 12-2021 | 699 | 40% |
| 12-2022 | 838 | 20% |
| 12-2023 | 1023 | 22% |
| 12-2024 | 1283 | 25% |
| 12-2025 | 1495 | 17% |
| 12-2026 | 1752 | 17% |
| 12-2027 | 2057 | 17% |
| 12-2028 | 2363 | 15% |
| 12-2029 | 2691 | 14% |
| 12-2030 | 2996 | 11% |
| 12-2031 | 3316 | 11% |
Net profit margin is expected to improve from -19% in 12-2021 to -11% by 12-2031, driven by operational efficiency and economies of scale.
| Fiscal Year | Net Profit (USD millions) | Profit Margin |
|---|---|---|
| 12-2021 | (136) | -19% |
| 12-2022 | (143) | -17% |
| 12-2023 | (161) | -16% |
| 12-2024 | (185) | -14% |
| 12-2025 | (197) | -13% |
| 12-2026 | (210) | -12% |
| 12-2027 | (242) | -12% |
| 12-2028 | (273) | -12% |
| 12-2029 | (305) | -11% |
| 12-2030 | (333) | -11% |
| 12-2031 | (362) | -11% |
with a 5-year average of $16 million. Projected CapEx is expected to maintain at approximately 4% of revenue.
Depreciation is based on an average useful life of 5 years for capital assets.
| Fiscal Year | D&A (USD millions) |
|---|---|
| 12-2022 | 20 |
| 12-2023 | 25 |
| 12-2024 | 34 |
| 12-2025 | 46 |
| 12-2026 | 56 |
| 12-2027 | 67 |
Net working capital is expected to increase gradually, with projected changes affecting free cash flow.
| Components | Average Days |
|---|---|
| Days Receivables | 55 |
| Days Inventory | 0 |
| Days Payables | 39 |
| Fiscal Year | EBITDA | Tax | CapEx | Change in NWC | FCF |
|---|---|---|---|---|---|
| 6M/2022 | (62) | (1) | 19 | 2 | (80) |
| 2023 | (136) | (3) | 45 | 28 | (205) |
| 2024 | (150) | (4) | 57 | 40 | (243) |
| 2025 | (151) | (4) | 66 | 24 | (237) |
| 2026 | (153) | (4) | 77 | 38 | (263) |
| Valuation Method | Fair Price (USD) | Potential Upside |
|---|---|---|
| 5-Year DCF (Growth) | 0.00 | -741.9% |
| 10-Year DCF (Growth) | 0.00 | -926.1% |
| 5-Year DCF (EBITDA) | 0.00 | -100.0% |
| 10-Year DCF (EBITDA) | 0.00 | -100.0% |
Is Avalara Inc (AVLR) a buy or a sell? Avalara Inc is definitely a sell. Based on our DCF analysis, Avalara Inc (AVLR) appears to be overvalued with upside potential of -926.1%. The company's strong projected growth in revenue and profitability, coupled with consistent capital expenditure, supports our positive outlook on its intrinsic value.
Key investment drivers include:
Investors should consider reducing exposure at the current market price of $93.48.