|Relative Value||80% undervalued|
An exponential growth model was fit to the past cash flow data, giving more weight to more recent years. This model determined a growth rate estimate of 13.1%.
The calculated WACC is 7.2%. This value is used as the default discount rate.
Assuming a growth rate of 13.1%, the cash flows for the next 5 years are projected.
The present value of each year's flow is adjusted to present value using the discount rate.
|Year||Future flow (billion)||Present value (billion)|
Assuming a growth rate after the projection years of 2.0%, the terminal value of the company would be 238 billion. This corresponds to a present value of 156 billion.
The total present value of the projected cash flows is 38.9 billion. Adding in the terminal value gives a total present value of 195 billion.
There are presently 145.0 million outstanding shares, so the intrinsic value per share is 1345.99.
The following data was to determine the past cash flows.
|Non-Cash Working Capital (NCWC)||1,509,800,000|
|Change in NCWC||975,000,000|
|Depreciation and Amortization||975,400,000|
|Unlevered Free Cash Flow||6,914,710,263|
|Non-Cash Working Capital (NCWC)||534,800,000|
|Change in NCWC||-3,100,000|
|Depreciation and Amortization||457,200,000|
|Unlevered Free Cash Flow||3,606,667,360|
|Non-Cash Working Capital (NCWC)||537,900,000|
|Change in NCWC||-269,800,000|
|Depreciation and Amortization||680,600,000|
|Unlevered Free Cash Flow||5,554,423,188|
|Non-Cash Working Capital (NCWC)||807,700,000|
|Change in NCWC||-11,600,000|
|Depreciation and Amortization||1,016,600,000|
|Unlevered Free Cash Flow||4,785,145,677|
|Non-Cash Working Capital (NCWC)||819,300,000|
|Change in NCWC||397,400,000|
|Depreciation and Amortization||1,081,000,000|
|Unlevered Free Cash Flow||2,513,423,034|
|Non-Cash Working Capital (NCWC)||421,900,000|
|Change in NCWC||-277,000,000|
|Depreciation and Amortization||682,700,000|
|Unlevered Free Cash Flow||3,913,183,796|
|Non-Cash Working Capital (NCWC)||698,900,000|
|Change in NCWC||88,181,000|
|Depreciation and Amortization||600,400,000|
|Unlevered Free Cash Flow||3,825,892,197|
|Non-Cash Working Capital (NCWC)||610,719,000|
|Change in NCWC||403,299,000|
|Depreciation and Amortization||688,150,000|
|Unlevered Free Cash Flow||3,722,914,178|
|Non-Cash Working Capital (NCWC)||207,420,000|
|Change in NCWC||-127,197,000|
|Depreciation and Amortization||531,740,000|
|Unlevered Free Cash Flow||2,027,773,831|
|Non-Cash Working Capital (NCWC)||334,617,000|
|Change in NCWC||-40,556,000|
|Depreciation and Amortization||365,648,000|
|Unlevered Free Cash Flow||1,431,548,268|
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