|Relative Value||95% 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 24.8%.
The calculated WACC is 3.3%. This value is used as the default discount rate.
Assuming a growth rate of 24.8%, 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 the company was sold after the projection period at an exit multiple of 30, the terminal value of the company would be 1190 billion. This corresponds to a present value of 980 billion.
The total present value of the projected cash flows is 120 billion. Adding in the terminal value gives a total present value of 1100 billion.
There are presently 1.69 billion outstanding shares, so the intrinsic value per share is 651.84.
The following data was to determine the past cash flows.
|Non-Cash Working Capital (NCWC)||11,961,114,311|
|Change in NCWC||-747,697,138|
|Depreciation and Amortization||7,728,439,477|
|Unlevered Free Cash Flow||12,628,263,577|
|Non-Cash Working Capital (NCWC)||12,708,811,449|
|Change in NCWC||6,079,694,213|
|Depreciation and Amortization||7,988,815,883|
|Unlevered Free Cash Flow||15,443,452,055|
|Non-Cash Working Capital (NCWC)||6,629,117,235|
|Change in NCWC||164,945,312|
|Depreciation and Amortization||8,976,468,722|
|Unlevered Free Cash Flow||1,583,188,043|
|Non-Cash Working Capital (NCWC)||6,464,171,923|
|Change in NCWC||7,077,950,743|
|Depreciation and Amortization||9,084,358,116|
|Unlevered Free Cash Flow||7,055,699,885|
|Non-Cash Working Capital (NCWC)||-613,778,820|
|Change in NCWC||-3,771,170,599|
|Depreciation and Amortization||7,987,125,503|
|Unlevered Free Cash Flow||-1,328,648,085|
|Non-Cash Working Capital (NCWC)||3,157,391,779|
|Change in NCWC||-1,988,362,483|
|Depreciation and Amortization||8,935,991,937|
|Unlevered Free Cash Flow||-868,185,341|
|Non-Cash Working Capital (NCWC)||5,145,754,262|
|Change in NCWC||-3,902,200,437|
|Depreciation and Amortization||7,983,734,908|
|Unlevered Free Cash Flow||-6,123,366,532|
|Non-Cash Working Capital (NCWC)||9,047,954,700|
|Change in NCWC||-5,444,805,450|
|Depreciation and Amortization||10,536,665,220|
|Unlevered Free Cash Flow||-11,834,036,670|
|Non-Cash Working Capital (NCWC)||14,492,760,150|
|Change in NCWC||-1,479,168,270|
|Depreciation and Amortization||12,129,003,500|
|Unlevered Free Cash Flow||-1,216,907,463|
|Non-Cash Working Capital (NCWC)||15,971,928,420|
|Change in NCWC||179,009,820|
|Depreciation and Amortization||12,963,861,260|
|Unlevered Free Cash Flow||-18,852,116|
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