|Relative Value||22% 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 16.1%.
The calculated WACC is 7.1%. This value is used as the default discount rate.
Assuming a growth rate of 16.1%, 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 (million)||Present value (million)|
Assuming a growth rate after the projection years of 2.0%, the terminal value of the company would be 5220 million. This corresponds to a present value of 3460 million.
The total present value of the projected cash flows is 791 million. Adding in the terminal value gives a total present value of 4250 million.
There are presently 103.0 million outstanding shares, so the intrinsic value per share is 41.46.
The following data was to determine the past cash flows.
|Non-Cash Working Capital (NCWC)||-4,910,000|
|Change in NCWC||-297,000|
|Depreciation and Amortization||2,969,000|
|Unlevered Free Cash Flow||100,572,251|
|Non-Cash Working Capital (NCWC)||-4,613,000|
|Change in NCWC||5,076,000|
|Depreciation and Amortization||3,067,000|
|Unlevered Free Cash Flow||119,709,872|
|Non-Cash Working Capital (NCWC)||-9,689,000|
|Change in NCWC||-2,244,000|
|Depreciation and Amortization||2,237,000|
|Unlevered Free Cash Flow||102,027,155|
|Non-Cash Working Capital (NCWC)||-7,445,000|
|Change in NCWC||-1,932,000|
|Depreciation and Amortization||2,171,000|
|Unlevered Free Cash Flow||89,239,490|
|Non-Cash Working Capital (NCWC)||-5,513,000|
|Change in NCWC||-11,385,000|
|Depreciation and Amortization||236,000|
|Unlevered Free Cash Flow||61,788,742|
|Non-Cash Working Capital (NCWC)||5,872,000|
|Change in NCWC||4,429,000|
|Depreciation and Amortization||106,000|
|Unlevered Free Cash Flow||56,971,000|
|Non-Cash Working Capital (NCWC)||1,443,000|
|Change in NCWC||-1,191,000|
|Depreciation and Amortization||87,000|
|Unlevered Free Cash Flow||8,881,000|
|Non-Cash Working Capital (NCWC)||2,634,000|
|Change in NCWC||783,000|
|Depreciation and Amortization||155,000|
|Unlevered Free Cash Flow||-2,522,000|
|Non-Cash Working Capital (NCWC)||1,851,000|
|Change in NCWC||5,412,000|
|Depreciation and Amortization||141,000|
|Unlevered Free Cash Flow||-22,240,000|
|Non-Cash Working Capital (NCWC)||-3,561,000|
|Change in NCWC||118,000|
|Depreciation and Amortization||74,000|
|Unlevered Free Cash Flow||-41,431,000|
|Non-Cash Working Capital (NCWC)||-3,679,000|
|Change in NCWC||1,207,000|
|Depreciation and Amortization||27,000|
|Unlevered Free Cash Flow||-35,189,000|
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