MDC Intrinsic Value

MDC

M.D.C. Holdings, Inc. – New Single-Family Housing Construction (except For-Sale Builders)

building one dream at a time. from the beginning, our mission has been to help people attain the american dream. nearly 40 years and more than 180,000 single-family homes later, we haven’t lost sight of that vision. we’re committed to designing quality homes and strengthening the communities in which we build. what sets us apart? it's the personal approach we take to every aspect of the homebuying experience. after all, it isn’t just a house we’re building. it’s someone’s home. a place where memories are made and dreams are realized. our job is to create a unique experience for each and every customer. that’s what making it personal is all about. the richmond american homes companies’ parent corporation, m.d.c. holdings, inc., is listed on the new york stock exchange under the symbol “mdc.” m.d.c.’s subsidiaries also provide mortgage financing, insurance and title services, primarily for richmond american homebuyers, through homeamerican mortgage corporation, american home insura

Analysis Results

Intrinsic Value	$409.04
Latest Price	$46.20
Relative Value	89% undervalued

Share results:

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Cash Flow (Billions)

Analysis Parameters

New Ticker

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 10.6%.

Weighted Average Cost of Capital (WACC)

The calculated WACC is 2.7%. This value is used as the default discount rate.

Value of Future Flows

Assuming a growth rate of 10.6%, 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	0.698	0.679
2024	0.772	0.731
2025	0.853	0.786
2026	0.943	0.846
2027	1.04	0.911

Terminal Value

Assuming the company was sold after the projection period at an exit multiple of 30, the terminal value of the company would be 31.3 billion. This corresponds to a present value of 26.6 billion.

Intrinsic Value Per Share

The total present value of the projected cash flows is 3.95 billion. Adding in the terminal value gives a total present value of 30.5 billion.

There are presently 74.7 million outstanding shares, so the intrinsic value per share is 409.04.

Financial Statements

The following data was to determine the past cash flows.

Current Assets	5,193,616,000
Current Cash	1,139,787,000
Current Liabilities	762,338,000
Current Debt	10,000,000
Non-Cash Working Capital (NCWC)	3,301,491,000
Change in NCWC	-169,030,000
EBIT	903,877,000
Tax Provision	197,715,000
Depreciation and Amortization	27,751,000
Capital Expenditure	-29,075,000
Unlevered Free Cash Flow	498,333,027

Current Assets	4,804,521,000
Current Cash	485,839,000
Current Liabilities	858,161,000
Current Debt	10,000,000
Non-Cash Working Capital (NCWC)	3,470,521,000
Change in NCWC	820,995,000
EBIT	776,376,000
Tax Provision	178,037,000
Depreciation and Amortization	31,666,000
Capital Expenditure	-29,693,000
Unlevered Free Cash Flow	1,415,461,124

Current Assets	3,728,284,000
Current Cash	411,362,000
Current Liabilities	677,396,000
Current Debt	10,000,000
Non-Cash Working Capital (NCWC)	2,649,526,000
Change in NCWC	409,221,000
EBIT	466,438,000
Tax Provision	89,930,000
Depreciation and Amortization	27,166,000
Capital Expenditure	-26,777,000
Unlevered Free Cash Flow	784,363,477

Current Assets	3,185,110,000
Current Cash	424,186,000
Current Liabilities	535,619,000
Current Debt	15,000,000
Non-Cash Working Capital (NCWC)	2,240,305,000
Change in NCWC	209,877,000
EBIT	302,489,000
Tax Provision	66,677,000
Depreciation and Amortization	23,054,000
Capital Expenditure	-24,714,000
Unlevered Free Cash Flow	444,575,552

Current Assets	2,867,262,000
Current Cash	414,724,000
Current Liabilities	437,110,000
Current Debt	15,000,000
Non-Cash Working Capital (NCWC)	2,030,428,000
Change in NCWC	281,592,000
EBIT	283,231,000
Tax Provision	53,074,000
Depreciation and Amortization	21,326,000
Capital Expenditure	-27,166,000
Unlevered Free Cash Flow	502,011,333

Current Assets	2,642,835,000
Current Cash	522,591,000
Current Liabilities	386,408,000
Current Debt	15,000,000
Non-Cash Working Capital (NCWC)	1,748,836,000
Change in NCWC	79,796,000
EBIT	181,274,000
Tax Provision	87,897,000
Depreciation and Amortization	5,321,000
Capital Expenditure	-2,539,000
Unlevered Free Cash Flow	194,495,354

Current Assets	2,339,770,000
Current Cash	318,857,000
Current Liabilities	366,873,000
Current Debt	15,000,000
Non-Cash Working Capital (NCWC)	1,669,040,000
Change in NCWC	6,091,000
EBIT	159,459,000
Tax Provision	48,570,000
Depreciation and Amortization	5,132,000
Capital Expenditure	-4,468,000
Unlevered Free Cash Flow	115,187,035

Current Assets	2,203,761,000
Current Cash	236,729,000
Current Liabilities	319,083,000
Current Debt	15,000,000
Non-Cash Working Capital (NCWC)	1,662,949,000
Change in NCWC	88,755,000
EBIT	112,885,000
Tax Provision	35,633,000
Depreciation and Amortization	4,069,000
Capital Expenditure	-1,491,000
Unlevered Free Cash Flow	164,558,440

Current Assets	2,106,366,000
Current Cash	263,520,000
Current Liabilities	283,652,000
Current Debt	15,000,000
Non-Cash Working Capital (NCWC)	1,574,194,000
Change in NCWC	246,698,000
EBIT	103,869,000
Tax Provision	37,332,000
Depreciation and Amortization	3,928,000
Capital Expenditure	-3,242,000
Unlevered Free Cash Flow	312,659,941

Current Assets	2,331,731,000
Current Cash	717,655,000
Current Liabilities	286,580,000
Current Debt	0
Non-Cash Working Capital (NCWC)	1,327,496,000
Change in NCWC	423,084,000
EBIT	106,455,000
Tax Provision	-184,560,000
Depreciation and Amortization	3,864,000
Capital Expenditure	-1,785,000
Unlevered Free Cash Flow	531,618,000

Current Assets	1,873,114,000
Current Cash	649,000,000
Current Liabilities	319,702,000
Current Debt	0
Non-Cash Working Capital (NCWC)	904,412,000
Change in NCWC	238,216,000
EBIT	39,402,000
Tax Provision	-1,584,000
Depreciation and Amortization	4,766,000
Capital Expenditure	-1,268,000
Unlevered Free Cash Flow	281,116,000

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