SEM Intrinsic Value

SEM

Select Medical Holdings Corporation – General Medical and Surgical Hospitals

Select Medical is one of the largest operators of critical illness recovery hospitals, rehabilitation hospitals, outpatient rehabilitation clinics, and occupational health centers in the United States based on the number of facilities. Our reportable segments include the critical illness recovery hospital segment, the rehabilitation hospital segment, the outpatient rehabilitation segment, and the Concentra segment. As of March 31, 2019, Select Medical operated 97 critical illness recovery hospitals in 28 states, 27 rehabilitation hospitals in 11 states, and 1,684 outpatient rehabilitation clinics in 37 states and the District of Columbia. Select Medical's joint venture subsidiary Concentra operated 525 occupational health centers in 41 states. Concentra also provides contract services at employer worksites and Department of Veterans Affairs community-based outpatient clinics. At March 31, 2019, Select Medical had operations in 47 states and the District of Columbia.

Analysis Results

Intrinsic Value	$172.45
Latest Price	$27.11
Relative Value	84% undervalued

Share results:

Thoughts on this result? Let us know.

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 6.4%. 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	0.603
2024	0.742	0.655
2025	0.858	0.712
2026	0.992	0.774
2027	1.15	0.841

Terminal Value

Assuming a growth rate after the projection years of 2.0%, the terminal value of the company would be 26.6 billion. This corresponds to a present value of 18.3 billion.

Intrinsic Value Per Share

The total present value of the projected cash flows is 3.59 billion. Adding in the terminal value gives a total present value of 21.9 billion.

There are presently 127.0 million outstanding shares, so the intrinsic value per share is 172.45.

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

This analysis is provided for informational purposes only and does not constitute financial or investing advice. For more information on the advantages and limitations of DCF analysis see background. This information is provided on an "as is" basis. No warranty, expressed or implied, is made regarding accuracy, adequacy, completeness, legality, reliability or usefulness of any information. By using this site you agree that under no circumstances shall Valuation Tools LLC be held liable for any loss or damage caused by information obtained from this website including any articles, data, videos, its social media accounts, or any other materials.