|Relative Value||78% 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 -18.2%.
The calculated WACC is 3.7%. This value is used as the default discount rate.
Assuming a growth rate of -18.2%, 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 the company was sold after the projection period at an exit multiple of 30, the terminal value of the company would be 84.4 million. This corresponds to a present value of 68.1 million.
The total present value of the projected cash flows is 20.0 million. Adding in the terminal value gives a total present value of 88.0 million.
There are presently 10.4 million outstanding shares, so the intrinsic value per share is 8.44.
The following data was to determine the past cash flows.
|Non-Cash Working Capital (NCWC)||-363,262|
|Change in NCWC||-6,368,754|
|Depreciation and Amortization||26,775,620|
|Unlevered Free Cash Flow||59,027|
|Non-Cash Working Capital (NCWC)||6,005,492|
|Change in NCWC||-197,705|
|Depreciation and Amortization||20,543,425|
|Unlevered Free Cash Flow||-116,163|
|Non-Cash Working Capital (NCWC)||6,203,197|
|Change in NCWC||5,410,233|
|Depreciation and Amortization||15,987,860|
|Unlevered Free Cash Flow||-1,834,278|
|Non-Cash Working Capital (NCWC)||792,964|
|Change in NCWC||-5,125,276|
|Depreciation and Amortization||14,060,927|
|Unlevered Free Cash Flow||-59,795,401|
|Non-Cash Working Capital (NCWC)||5,918,240|
|Change in NCWC||-23,658,421|
|Depreciation and Amortization||17,443,318|
|Unlevered Free Cash Flow||-52,219,627|
|Non-Cash Working Capital (NCWC)||29,576,661|
|Change in NCWC||-14,548,737|
|Depreciation and Amortization||20,197,313|
|Unlevered Free Cash Flow||1,545,540|
|Non-Cash Working Capital (NCWC)||44,125,398|
|Change in NCWC||2,790,294|
|Depreciation and Amortization||24,880,246|
|Unlevered Free Cash Flow||46,538,412|
|Non-Cash Working Capital (NCWC)||41,335,104|
|Change in NCWC||1,670,029|
|Depreciation and Amortization||29,095,648|
|Unlevered Free Cash Flow||41,472,400|
|Non-Cash Working Capital (NCWC)||39,665,075|
|Change in NCWC||524,381|
|Depreciation and Amortization||27,642,222|
|Unlevered Free Cash Flow||38,787,551|
|Non-Cash Working Capital (NCWC)||39,140,694|
|Change in NCWC||7,945,500|
|Depreciation and Amortization||27,460,693|
|Unlevered Free Cash Flow||50,200,255|
|Non-Cash Working Capital (NCWC)||31,195,194|
|Change in NCWC||16,243,153|
|Depreciation and Amortization||23,317,594|
|Unlevered Free Cash Flow||17,142,328|
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