As of July 16, 2025, Carrols Restaurant Group Inc has a Discounted Cash Flow (DCF) derived fair value of $13.59 per share. With the current market price at $9.54, this represents a potential upside of 42.5%.
| Key Metrics | Value |
|---|---|
| DCF Fair Value (5-year) | $11.18 |
| DCF Fair Value (10-year) | $13.59 |
| Potential Upside (5-year) | 17.2% |
| Potential Upside (10-year) | 42.5% |
| Discount Rate (WACC) | 6.0% - 8.8% |
Revenue is projected to grow from $1877 million in 12-2023 to $2472 million by 12-2033, representing a compound annual growth rate of approximately 2.8%.
| Fiscal Year | Revenue (USD millions) | Growth |
|---|---|---|
| 12-2023 | 1877 | 8% |
| 12-2024 | 1950 | 4% |
| 12-2025 | 1989 | 2% |
| 12-2026 | 2046 | 3% |
| 12-2027 | 2107 | 3% |
| 12-2028 | 2163 | 3% |
| 12-2029 | 2244 | 4% |
| 12-2030 | 2305 | 3% |
| 12-2031 | 2361 | 2% |
| 12-2032 | 2408 | 2% |
| 12-2033 | 2472 | 3% |
Net profit margin is expected to improve from 2% in 12-2023 to 2% by 12-2033, driven by operational efficiency and economies of scale.
| Fiscal Year | Net Profit (USD millions) | Profit Margin |
|---|---|---|
| 12-2023 | 34 | 2% |
| 12-2024 | 35 | 2% |
| 12-2025 | 36 | 2% |
| 12-2026 | 37 | 2% |
| 12-2027 | 38 | 2% |
| 12-2028 | 39 | 2% |
| 12-2029 | 40 | 2% |
| 12-2030 | 42 | 2% |
| 12-2031 | 43 | 2% |
| 12-2032 | 43 | 2% |
| 12-2033 | 45 | 2% |
with a 5-year average of $69 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) |
|---|---|
| 12-2024 | 57 |
| 12-2025 | 63 |
| 12-2026 | 71 |
| 12-2027 | 82 |
| 12-2028 | 90 |
| 12-2029 | 92 |
Net working capital is expected to increase gradually, with projected changes affecting free cash flow.
| Components | Average Days |
|---|---|
| Days Receivables | 4 |
| Days Inventory | 5 |
| Days Payables | 11 |
| Fiscal Year | EBITDA | Tax | CapEx | Change in NWC | FCF |
|---|---|---|---|---|---|
| 2024 | 127 | 5 | 85 | 2 | 35 |
| 2025 | 135 | 5 | 87 | 1 | 42 |
| 2026 | 144 | 5 | 90 | (1) | 51 |
| 2027 | 157 | 5 | 92 | 1 | 60 |
| 2028 | 167 | 5 | 95 | 0 | 68 |
| Valuation Method | Fair Price (USD) | Potential Upside |
|---|---|---|
| 5-Year DCF (Growth) | 11.18 | 17.2% |
| 10-Year DCF (Growth) | 13.59 | 42.5% |
| 5-Year DCF (EBITDA) | 9.89 | 3.7% |
| 10-Year DCF (EBITDA) | 11.71 | 22.8% |
Is Carrols Restaurant Group Inc (TAST) a buy or a sell? Carrols Restaurant Group Inc is definitely a buy. Based on our DCF analysis, Carrols Restaurant Group Inc (TAST) appears to be significantly undervalued with upside potential of 42.5%. 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 a strong buy at the current market price of $9.54.