DCF Tool

FOR

Forestar Group Inc – Offices of Real Estate Agents and Brokers
today, we own directly or through ventures about 281,000 acres of real estate located in 9 states and 12 markets, 622,000 net acres of oil and gas mineral interests, about 231,000 forested acres and over 224,000 acres currently leased for recreational purposes.
Analysis Results
Intrinsic Value $460.25
Latest Price $33.38
Relative Value 93% undervalued
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Cash Flow (Billions)
Analysis Parameters
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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 41.3%.

Weighted Average Cost of Capital (WACC)

The calculated WACC is 6.2%. This value is used as the default discount rate.

Value of Future Flows

Assuming a growth rate of 41.3%, 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)
2023 0.301 0.284
2024 0.426 0.377
2025 0.602 0.502
2026 0.851 0.668
2027 1.2 0.889
Terminal Value

Assuming a growth rate after the projection years of 2.0%, the terminal value of the company would be 29.1 billion. This corresponds to a present value of 20.3 billion.

Intrinsic Value Per Share

The total present value of the projected cash flows is 2.72 billion. Adding in the terminal value gives a total present value of 23.0 billion.

There are presently 49.9 million outstanding shares, so the intrinsic value per share is 460.25.

Financial Statements

The following data was to determine the past cash flows.

Current Assets 657,400,000
Current Cash 616,000,000
Current Liabilities 343,300,000
Current Debt 0
Non-Cash Working Capital (NCWC) -301,900,000
Change in NCWC 59,500,000
EBIT 208,000,000
Tax Provision 54,700,000
Depreciation and Amortization 3,000,000
Capital Expenditure -1,300,000
Unlevered Free Cash Flow 217,857,039
Current Assets 295,100,000
Current Cash 264,800,000
Current Liabilities 391,700,000
Current Debt 0
Non-Cash Working Capital (NCWC) -361,400,000
Change in NCWC -29,600,000
EBIT 234,800,000
Tax Provision 57,000,000
Depreciation and Amortization 2,700,000
Capital Expenditure -3,500,000
Unlevered Free Cash Flow 147,641,730
Current Assets 170,100,000
Current Cash 153,600,000
Current Liabilities 348,300,000
Current Debt 0
Non-Cash Working Capital (NCWC) -331,800,000
Change in NCWC -141,200,000
EBIT 163,500,000
Tax Provision 36,100,000
Depreciation and Amortization 2,700,000
Capital Expenditure -1,600,000
Unlevered Free Cash Flow -16,861,596
Current Assets 410,700,000
Current Cash 394,300,000
Current Liabilities 207,000,000
Current Debt 0
Non-Cash Working Capital (NCWC) -190,600,000
Change in NCWC -14,800,000
EBIT 73,200,000
Tax Provision 16,400,000
Depreciation and Amortization 4,900,000
Capital Expenditure -600,000
Unlevered Free Cash Flow 47,328,937
Current Assets 390,500,000
Current Cash 382,800,000
Current Liabilities 183,500,000
Current Debt 0
Non-Cash Working Capital (NCWC) -175,800,000
Change in NCWC -199,016,000
EBIT 40,200,000
Tax Provision 9,400,000
Depreciation and Amortization 6,700,000
Capital Expenditure -900,000
Unlevered Free Cash Flow -161,284,708
Current Assets 377,899,000
Current Cash 321,783,000
Current Liabilities 32,900,000
Current Debt 0
Non-Cash Working Capital (NCWC) 23,216,000
Change in NCWC 37,050,000
EBIT 57,664,000
Tax Provision 45,820,000
Depreciation and Amortization 5,463,000
Capital Expenditure -2,452,000
Unlevered Free Cash Flow 47,032,103
Current Assets 287,596,000
Current Cash 265,798,000
Current Liabilities 35,632,000
Current Debt 0
Non-Cash Working Capital (NCWC) -13,834,000
Change in NCWC 7,534,000
EBIT 146,477,000
Tax Provision 15,302,000
Depreciation and Amortization 11,447,000
Capital Expenditure -6,717,000
Unlevered Free Cash Flow 134,469,336
Current Assets 135,367,000
Current Cash 96,442,000
Current Liabilities 60,293,000
Current Debt 0
Non-Cash Working Capital (NCWC) -21,368,000
Change in NCWC 24,454,000
EBIT -148,676,000
Tax Provision 32,635,000
Depreciation and Amortization 45,085,000
Capital Expenditure -64,407,000
Unlevered Free Cash Flow -143,544,000
Current Assets 208,219,000
Current Cash 170,127,000
Current Liabilities 83,914,000
Current Debt 0
Non-Cash Working Capital (NCWC) -45,822,000
Change in NCWC -20,019,000
EBIT 47,443,000
Tax Provision 8,657,000
Depreciation and Amortization 41,715,000
Capital Expenditure -117,543,000
Unlevered Free Cash Flow -64,357,157
Current Assets 236,695,000
Current Cash 192,307,000
Current Liabilities 70,191,000
Current Debt 0
Non-Cash Working Capital (NCWC) -25,803,000
Change in NCWC -13,260,000
EBIT 55,314,000
Tax Provision 7,208,000
Depreciation and Amortization 29,980,000
Capital Expenditure -107,897,000
Unlevered Free Cash Flow -45,295,522
Current Assets 50,439,000
Current Cash 10,361,000
Current Liabilities 52,621,000
Current Debt 0
Non-Cash Working Capital (NCWC) -12,543,000
Change in NCWC -10,001,000
EBIT 41,634,000
Tax Provision 8,016,000
Depreciation and Amortization 18,926,000
Capital Expenditure -24,151,000
Unlevered Free Cash Flow 13,518,376
Current Assets 44,495,000
Current Cash 18,283,000
Current Liabilities 28,754,000
Current Debt 0
Non-Cash Working Capital (NCWC) -2,542,000
Change in NCWC 13,937,000
EBIT 28,906,000
Tax Provision 3,021,000
Depreciation and Amortization 9,812,000
Capital Expenditure -6,348,000
Unlevered Free Cash Flow 39,185,402

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