DCF Tool

LPLA

LPL Financial Holdings Inc – Investment Advice
lpl financial, a wholly owned subsidiary of lpl financial holdings inc. (nasdaq:lpla), is a leader in the retail financial advice market and currently serves $462 billion in advisory and brokerage assets. lpl is one of the fastest growing ria custodians and is the nation's largest independent broker-dealer (based on total revenues, financial planning magazine june 1996-2015). the company provides proprietary technology, comprehensive clearing and compliance services, practice management programs and training, and independent research to more than 14,000 independent financial advisors and over 700 banks and credit unions, enabling them to help their clients turn life's aspirations into financial realities. advisors associated with lpl also service an estimated 40,000 retirement plans with an estimated $115 billion in retirement plan assets, as of september 30, 2015. lpl also supports approximately 4,300 financial advisors licensed and affiliated with insurance companies with customi
Analysis Results
Intrinsic Value $846.37
Latest Price $237.06
Relative Value 72% 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 22.9%.

Weighted Average Cost of Capital (WACC)

The calculated WACC is 6.3%. This value is used as the default discount rate.

Value of Future Flows

Assuming a growth rate of 22.9%, 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 1.45 1.36
2024 1.78 1.57
2025 2.18 1.82
2026 2.68 2.1
2027 3.29 2.43
Terminal Value

Assuming a growth rate after the projection years of 2.0%, the terminal value of the company would be 78.9 billion. This corresponds to a present value of 54.8 billion.

Intrinsic Value Per Share

The total present value of the projected cash flows is 9.29 billion. Adding in the terminal value gives a total present value of 64.1 billion.

There are presently 75.7 million outstanding shares, so the intrinsic value per share is 846.37.

Financial Statements

The following data was to determine the past cash flows.

Current Assets 5,669,135,000
Current Cash 0
Current Liabilities 3,632,712,000
Current Debt 0
Non-Cash Working Capital (NCWC) 2,036,423,000
Change in NCWC 296,130,000
EBIT 1,111,653,000
Tax Provision 265,951,000
Depreciation and Amortization 287,377,000
Capital Expenditure -306,596,000
Unlevered Free Cash Flow 1,122,613,000
Current Assets 4,389,966,000
Current Cash 0
Current Liabilities 2,649,673,000
Current Debt 0
Non-Cash Working Capital (NCWC) 1,740,293,000
Change in NCWC 737,589,000
EBIT 625,729,000
Tax Provision 141,463,000
Depreciation and Amortization 230,688,000
Capital Expenditure -215,987,000
Unlevered Free Cash Flow 1,230,815,885
Current Assets 3,296,697,000
Current Cash 0
Current Liabilities 2,293,993,000
Current Debt 0
Non-Cash Working Capital (NCWC) 1,002,704,000
Change in NCWC 148,009,000
EBIT 731,838,000
Tax Provision 153,433,000
Depreciation and Amortization 177,090,000
Capital Expenditure -155,532,000
Unlevered Free Cash Flow 722,051,953
Current Assets 2,841,016,000
Current Cash 0
Current Liabilities 1,986,321,000
Current Debt 0
Non-Cash Working Capital (NCWC) 854,695,000
Change in NCWC -32,298,000
EBIT 874,992,000
Tax Provision 181,955,000
Depreciation and Amortization 161,113,000
Capital Expenditure -156,389,000
Unlevered Free Cash Flow 632,802,661
Current Assets 2,670,657,000
Current Cash 0
Current Liabilities 1,783,664,000
Current Debt 0
Non-Cash Working Capital (NCWC) 886,993,000
Change in NCWC -19,485,000
EBIT 717,660,000
Tax Provision 153,178,000
Depreciation and Amortization 147,908,000
Capital Expenditure -132,688,000
Unlevered Free Cash Flow 527,902,491
Current Assets 2,605,748,000
Current Cash 0
Current Liabilities 1,699,270,000
Current Debt 0
Non-Cash Working Capital (NCWC) 906,478,000
Change in NCWC -27,361,000
EBIT 494,002,000
Tax Provision 125,707,000
Depreciation and Amortization 122,364,000
Capital Expenditure -111,910,000
Unlevered Free Cash Flow 306,758,687
Current Assets 2,442,232,000
Current Cash 0
Current Liabilities 1,508,393,000
Current Debt 0
Non-Cash Working Capital (NCWC) 933,839,000
Change in NCWC 12,561,000
EBIT 393,994,000
Tax Provision 105,585,000
Depreciation and Amortization 113,963,000
Capital Expenditure -127,646,000
Unlevered Free Cash Flow 253,048,069
Current Assets 2,253,163,000
Current Cash 0
Current Liabilities 1,331,885,000
Current Debt 0
Non-Cash Working Capital (NCWC) 921,278,000
Change in NCWC 276,856,000
EBIT 353,658,000
Tax Provision 113,771,000
Depreciation and Amortization 111,622,000
Capital Expenditure -72,565,000
Unlevered Free Cash Flow 527,170,319
Current Assets 1,842,750,000
Current Cash 0
Current Liabilities 1,198,328,000
Current Debt 0
Non-Cash Working Capital (NCWC) 644,422,000
Change in NCWC -143,207,000
EBIT 384,830,000
Tax Provision 116,654,000
Depreciation and Amortization 96,845,000
Capital Expenditure -89,648,000
Unlevered Free Cash Flow 96,487,404
Current Assets 1,871,617,000
Current Cash 0
Current Liabilities 1,083,988,000
Current Debt 0
Non-Cash Working Capital (NCWC) 787,629,000
Change in NCWC 120,314,000
EBIT 380,897,000
Tax Provision 109,446,000
Depreciation and Amortization 83,503,000
Capital Expenditure -78,239,000
Unlevered Free Cash Flow 363,367,469
Current Assets 1,840,735,000
Current Cash 0
Current Liabilities 1,173,420,000
Current Debt 0
Non-Cash Working Capital (NCWC) 667,315,000
Change in NCWC -270,333,000
EBIT 327,538,000
Tax Provision 98,673,000
Depreciation and Amortization 71,796,000
Capital Expenditure -54,786,000
Unlevered Free Cash Flow -54,756,739

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