Rush Enterprises operates as an integrated retailer of commercial vehicles and related services in the United States. The company was founded in 1965 and is based in New Braunfels, Texas.
RUSHA Price Forecast Based on DCF Valuation
DCF Fair Value Target:
The table below illustrates the output of a discounted cash flow forecast using a variety of scenarios for Rush Enterprises Inc. To summarize, we found that Rush Enterprises Inc ranked in the 91th percentile in terms of potential gain offered. Moreover, under all the scenarios we modelled, the output consistently forecasted positive returns. As for the metrics that stood out in our discounted cash flow analysis of Rush Enterprises Inc, consider:
The compound growth rate in the free cash flow of Rush Enterprises Inc over the past 4.5 years is 0.55%; that's higher than 83.57% of free cash flow generating stocks in the Consumer Cyclical sector.
Rush Enterprises Inc's weighted average cost of capital (WACC) is 8%; for context, that number is higher than just 4.1% of tickers in our DCF set.
RUSHA's estimated cost of debt, based largely on its market capitalization and its interest coverage ratio, is 3%; for context, that number is higher than just 4.1% of tickers in our DCF set.
Terminal Growth Rate in Free Cash Flow
Return Relative to Current Share Price
For other companies in the Consumer Cyclical that have a similar discounted cashflow valuation profile (and ensuing price forecasts) as RUSHA, try TA, EDUC, ABG, EYE, and BH.
A company that is capable of generating earnings well above its interest expense can withstand financial hardship. Companies such as AGCO Corporation (AGCO), Crocs (CROX), Rush Enterprises (RUSHA), Sprouts Farmers (SFM) and CBRE Group (CBRE) are sound enough to meet financial obligations.
Rush Enterprises (NASDAQ:RUSHA) provides end-to-end solutions for commercial vehicles through its ‘Rush Truck Centers’ and ‘Rush Truck Leasing Locations’ across the United States. The company’s main revenue stream is its ‘aftermarket products and services’ division, which provides continuous maintenance for its own commercial vehicle sales through repairs or part replacements....
Ophelia Research on Seeking Alpha | December 27, 2020
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