SEM Intrinsic Value

SEM

Select Medical Holdings Corporation – General Medical and Surgical Hospitals

select medical encompasses four areas of expertise: long-term acute care, inpatient medical rehabilitation, outpatient physical therapy and contract therapy, all of which are delivered and supported by nearly 40,000 talented colleagues across the united states. despite its record growth, select medical remains true to its founding principles of clinical quality and operational excellence, which have been a top priority since day one. regardless of size or scope, the select medical team remains devoted to helping others and achieving outcomes that improve quality of life. our vision • the select medical way is to put the patient first • the select medical way is to help improve quality of life for the community in which we live and work • the select medical way is to be open to and welcoming of new ideas from all levels of the organization to continually improve • the select medical way is to attract, train, and retain the best possible staff • the select medical way is to st

Analysis Results

Intrinsic Value	$245.87
Latest Price	$23.45
Relative Value	90% 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 15.6%.

Weighted Average Cost of Capital (WACC)

The calculated WACC is 3.7%. This value is used as the default discount rate.

Value of Future Flows

Assuming a growth rate of 15.6%, 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	0.642	0.619
2024	0.742	0.69
2025	0.858	0.769
2026	0.992	0.857
2027	1.15	0.955

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 34.4 billion. This corresponds to a present value of 27.6 billion.

Intrinsic Value Per Share

The total present value of the projected cash flows is 3.89 billion. Adding in the terminal value gives a total present value of 31.5 billion.

There are presently 128.0 million outstanding shares, so the intrinsic value per share is 245.87.

Financial Statements

The following data was to determine the past cash flows.

Current Assets	1,271,313,000
Current Cash	97,906,000
Current Liabilities	1,155,151,000
Current Debt	76,312,000
Non-Cash Working Capital (NCWC)	94,568,000
Change in NCWC	242,591,000
EBIT	400,924,000
Tax Provision	62,553,000
Depreciation and Amortization	205,825,000
Capital Expenditure	-190,372,000
Unlevered Free Cash Flow	562,724,638

Current Assets	1,139,439,000
Current Cash	74,310,000
Current Liabilities	1,273,077,000
Current Debt	59,925,000
Non-Cash Working Capital (NCWC)	-148,023,000
Change in NCWC	260,783,000
EBIT	614,174,000
Tax Provision	129,773,000
Depreciation and Amortization	202,645,000
Capital Expenditure	-180,537,000
Unlevered Free Cash Flow	770,496,129

Current Assets	1,594,000,000
Current Cash	577,061,000
Current Liabilities	1,438,366,000
Current Debt	12,621,000
Non-Cash Working Capital (NCWC)	-408,806,000
Change in NCWC	-396,803,000
EBIT	507,085,000
Tax Provision	111,867,000
Depreciation and Amortization	205,659,000
Capital Expenditure	-146,440,000
Unlevered Free Cash Flow	45,230,610

Current Assets	1,212,992,000
Current Cash	335,882,000
Current Liabilities	914,280,000
Current Debt	25,167,000
Non-Cash Working Capital (NCWC)	-12,003,000
Change in NCWC	-193,111,000
EBIT	496,870,000
Tax Provision	63,718,000
Depreciation and Amortization	212,576,000
Capital Expenditure	-157,126,000
Unlevered Free Cash Flow	239,625,686

Current Assets	992,524,000
Current Cash	175,178,000
Current Liabilities	705,186,000
Current Debt	68,948,000
Non-Cash Working Capital (NCWC)	181,108,000
Change in NCWC	-63,416,000
EBIT	439,184,000
Tax Provision	58,610,000
Depreciation and Amortization	201,655,000
Capital Expenditure	-167,281,000
Unlevered Free Cash Flow	300,864,327

Current Assets	920,826,000
Current Cash	122,549,000
Current Liabilities	605,403,000
Current Debt	51,650,000
Non-Cash Working Capital (NCWC)	244,524,000
Change in NCWC	54,102,000
EBIT	376,932,000
Tax Provision	-18,184,000
Depreciation and Amortization	160,011,000
Capital Expenditure	-233,243,000
Unlevered Free Cash Flow	357,802,000

Current Assets	808,068,000
Current Cash	99,029,000
Current Liabilities	571,635,000
Current Debt	53,018,000
Non-Cash Working Capital (NCWC)	190,422,000
Change in NCWC	-68,793,000
EBIT	319,790,000
Tax Provision	55,464,000
Depreciation and Amortization	145,311,000
Capital Expenditure	-161,633,000
Unlevered Free Cash Flow	136,537,225

Current Assets	749,154,000
Current Cash	14,435,000
Current Liabilities	737,689,000
Current Debt	262,185,000
Non-Cash Working Capital (NCWC)	259,215,000
Change in NCWC	96,729,000
EBIT	291,601,000
Tax Provision	72,436,000
Depreciation and Amortization	104,981,000
Capital Expenditure	-182,642,000
Unlevered Free Cash Flow	209,329,426

Current Assets	527,644,000
Current Cash	3,354,000
Current Liabilities	394,424,000
Current Debt	32,620,000
Non-Cash Working Capital (NCWC)	162,486,000
Change in NCWC	53,856,000
EBIT	291,520,000
Tax Provision	75,622,000
Depreciation and Amortization	68,354,000
Capital Expenditure	-95,246,000
Unlevered Free Cash Flow	210,311,036

Current Assets	454,402,000
Current Cash	4,319,000
Current Liabilities	371,524,000
Current Debt	30,071,000
Non-Cash Working Capital (NCWC)	108,630,000
Change in NCWC	54,092,000
EBIT	303,912,000
Tax Provision	74,792,000
Depreciation and Amortization	64,392,000
Capital Expenditure	-73,660,000
Unlevered Free Cash Flow	233,821,584

Current Assets	453,663,000
Current Cash	40,144,000
Current Liabilities	388,463,000
Current Debt	29,482,000
Non-Cash Working Capital (NCWC)	54,538,000
Change in NCWC	-60,348,000
EBIT	344,564,000
Tax Provision	89,657,000
Depreciation and Amortization	63,311,000
Capital Expenditure	-68,185,000
Unlevered Free Cash Flow	152,499,156

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