DCF Tool

CNXN

PC Connection, Inc. – Business to Business Electronic Markets
PC Connection, Inc. and its subsidiaries, dba Connection, (www.connection.com; NASDAQ: CNXN) is a Fortune 1000 company headquartered in Merrimack, NH. With offices throughout the United States, Connection delivers custom-configured computer systems overnight from its ISO 9001:2015 certified technical configuration lab at its distribution center in Wilmington, OH. In addition, the Company has over 2,500 technical certifications to ensure that it can solve the most complex issues of its customers. Connection also services international customers through its GlobalServe subsidiary, a global IT procurement and service management company.
Analysis Results
Intrinsic Value $104.88
Latest Price $48.51
Relative Value 54% undervalued
Thoughts on this result? Let us know.
Ad
Cash Flow (Millions)
Analysis Parameters
%
%
%
New Ticker
Ad
Analysis Details
Growth Rate Projection

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 8.5%.

Weighted Average Cost of Capital (WACC)

The calculated WACC is 7.0%. This value is used as the default discount rate.

Value of Future Flows

Assuming a growth rate of 8.5%, 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 (million) Present value (million)
2022 117 110
2023 127 111
2024 138 113
2025 150 114
2026 163 116
Terminal Value

Assuming a growth rate after the projection years of 2.0%, the terminal value of the company would be 3300 million. This corresponds to a present value of 2190 million.

Intrinsic Value Per Share

The total present value of the projected cash flows is 564 million. Adding in the terminal value gives a total present value of 2760 million.

There are presently 26.3 million outstanding shares, so the intrinsic value per share is 104.88.

Financial Statements

The following data was to determine the past cash flows.

Current Assets 932,413,000
Current Cash 108,310,000
Current Liabilities 374,632,000
Current Debt 0
Non-Cash Working Capital (NCWC) 449,471,000
Change in NCWC 28,406,000
EBIT 96,517,000
Tax Provision 26,616,000
Depreciation and Amortization 12,202,000
Capital Expenditure -10,302,000
Unlevered Free Cash Flow 100,208,378
Current Assets 858,980,000
Current Cash 95,655,000
Current Liabilities 342,260,000
Current Debt 0
Non-Cash Working Capital (NCWC) 421,065,000
Change in NCWC 43,637,000
EBIT 73,066,000
Tax Provision 17,431,000
Depreciation and Amortization 13,603,000
Capital Expenditure -11,033,000
Unlevered Free Cash Flow 101,872,958
Current Assets 776,411,000
Current Cash 90,060,000
Current Liabilities 308,923,000
Current Debt 0
Non-Cash Working Capital (NCWC) 377,428,000
Change in NCWC 59,751,000
EBIT 112,675,000
Tax Provision 30,568,000
Depreciation and Amortization 13,314,000
Capital Expenditure -25,656,000
Unlevered Free Cash Flow 129,517,085
Current Assets 669,179,000
Current Cash 91,703,000
Current Liabilities 259,799,000
Current Debt 0
Non-Cash Working Capital (NCWC) 317,677,000
Change in NCWC -413,000
EBIT 86,653,000
Tax Provision 24,072,000
Depreciation and Amortization 14,063,000
Capital Expenditure -21,238,000
Unlevered Free Cash Flow 55,538,980
Current Assets 616,095,000
Current Cash 49,990,000
Current Liabilities 248,015,000
Current Debt 0
Non-Cash Working Capital (NCWC) 318,090,000
Change in NCWC 38,353,000
EBIT 77,527,000
Tax Provision 22,768,000
Depreciation and Amortization 11,839,000
Capital Expenditure -11,803,000
Unlevered Free Cash Flow 93,176,744
Current Assets 559,171,000
Current Cash 49,180,000
Current Liabilities 230,254,000
Current Debt 0
Non-Cash Working Capital (NCWC) 279,737,000
Change in NCWC 29,077,000
EBIT 80,520,000
Tax Provision 32,342,000
Depreciation and Amortization 10,453,000
Capital Expenditure -11,885,000
Unlevered Free Cash Flow 75,796,066
Current Assets 552,851,000
Current Cash 80,188,000
Current Liabilities 222,003,000
Current Debt 0
Non-Cash Working Capital (NCWC) 250,660,000
Change in NCWC 18,120,000
EBIT 78,554,000
Tax Provision 31,640,000
Depreciation and Amortization 8,961,000
Capital Expenditure -12,337,000
Unlevered Free Cash Flow 61,622,919
Current Assets 458,146,000
Current Cash 60,909,000
Current Liabilities 164,697,000
Current Debt 0
Non-Cash Working Capital (NCWC) 232,540,000
Change in NCWC 18,711,000
EBIT 71,454,000
Tax Provision 28,687,000
Depreciation and Amortization 8,092,000
Capital Expenditure -7,609,000
Unlevered Free Cash Flow 61,926,431
Current Assets 418,494,000
Current Cash 42,547,000
Current Liabilities 162,118,000
Current Debt 0
Non-Cash Working Capital (NCWC) 213,829,000
Change in NCWC 29,760,000
EBIT 59,396,000
Tax Provision 23,565,000
Depreciation and Amortization 7,089,000
Capital Expenditure -7,607,000
Unlevered Free Cash Flow 65,013,736
Current Assets 386,472,000
Current Cash 39,907,000
Current Liabilities 163,485,000
Current Debt 989,000
Non-Cash Working Capital (NCWC) 184,069,000
Change in NCWC -24,866,000
EBIT 55,767,000
Tax Provision 21,436,000
Depreciation and Amortization 6,895,000
Capital Expenditure -9,250,000
Unlevered Free Cash Flow 6,614,479

This analysis is provided for informational purposes only and does not constitute financial or investing advice. For more information on the advantages and limitations of DCF analysis see background. This information is provided on an "as is" basis. No warranty, expressed or implied, is made regarding accuracy, adequacy, completeness, legality, reliability or usefulness of any information. By using this site you agree that under no circumstances shall Valuation Tools LLC be held liable for any loss or damage caused by information obtained from this website including any articles, data, videos, its social media accounts, or any other materials.