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SolarWinds Corp – Data Processing, Hosting, and Related Services
SolarWinds is a leading provider of powerful and affordable IT management software. Its products give organizations worldwide-regardless of type, size, or complexity-the power to monitor and manage their IT services, infrastructures, and applications; whether on-premises, in the cloud, or via hybrid models. The company continuously engages with technology professionals-IT service and operations professionals, DevOps professionals, and managed services providers (MSPs)-to understand the challenges they face in maintaining high-performing and highly available IT infrastructures and applications. The insights the company gains from them, in places like its THWACK® community, allow SolarWinds to solve well-understood IT management challenges in the ways technology professionals want them solved. Its focus on the user and commitment to excellence in end-to-end hybrid IT management has established SolarWinds as a worldwide leader in solutions for network and IT service management, application performance, and managed services. Targeted for MSPs, the SolarWinds MSP product portfolio delivers broad, scalable IT service management solutions that integrate layered security, collective intelligence, and smart automation. Its products are designed to enable MSPs to provide highly-effective outsourced IT services for their SMB end-customers and more efficiently manage their own businesses.
Analysis Results
Intrinsic Value $7.17
Latest Price $9.17
Relative Value 28% overvalued
Thoughts on this result? Let us know.
Cash Flow (Millions)
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 -14.3%.

Weighted Average Cost of Capital (WACC)

The calculated WACC is 9.3%. This value is used as the default discount rate.

Value of Future Flows

Assuming a growth rate of -14.3%, 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)
2023 160 146
2024 137 114
2025 117 89.6
2026 100 70.2
2027 86.0 55.0
Terminal Value

Assuming a growth rate after the projection years of 2.0%, the terminal value of the company would be 1190 million. This corresponds to a present value of 698 million.

Intrinsic Value Per Share

The total present value of the projected cash flows is 475 million. Adding in the terminal value gives a total present value of 1170 million.

There are presently 164.0 million outstanding shares, so the intrinsic value per share is 7.17.

Financial Statements

The following data was to determine the past cash flows.

Current Assets 307,393,000
Current Cash 148,852,000
Current Liabilities 456,633,000
Current Debt 9,338,000
Non-Cash Working Capital (NCWC) -288,754,000
Change in NCWC -21,501,000
EBIT 71,522,000
Tax Provision 21,386,000
Depreciation and Amortization 94,981,000
Capital Expenditure -20,750,000
Unlevered Free Cash Flow 124,252,000
Current Assets 858,840,000
Current Cash 732,116,000
Current Liabilities 413,877,000
Current Debt 19,900,000
Non-Cash Working Capital (NCWC) -267,253,000
Change in NCWC 61,816,000
EBIT -32,871,000
Tax Provision -32,469,000
Depreciation and Amortization 230,135,000
Capital Expenditure -13,916,000
Unlevered Free Cash Flow 245,164,000
Current Assets 512,733,000
Current Cash 370,498,000
Current Liabilities 491,204,000
Current Debt 19,900,000
Non-Cash Working Capital (NCWC) -329,069,000
Change in NCWC -72,483,000
EBIT 107,443,000
Tax Provision -128,156,000
Depreciation and Amortization 277,856,000
Capital Expenditure -38,220,000
Unlevered Free Cash Flow 274,596,000
Current Assets 319,899,000
Current Cash 173,372,000
Current Liabilities 423,013,000
Current Debt 19,900,000
Non-Cash Working Capital (NCWC) -256,586,000
Change in NCWC -26,072,000
EBIT 135,173,000
Tax Provision 8,862,000
Depreciation and Amortization 263,244,000
Capital Expenditure -23,041,000
Unlevered Free Cash Flow 305,750,221
Current Assets 500,308,000
Current Cash 382,620,000
Current Liabilities 368,102,000
Current Debt 19,900,000
Non-Cash Working Capital (NCWC) -230,514,000
Change in NCWC -30,247,000
EBIT 115,185,000
Tax Provision -19,644,000
Depreciation and Amortization 258,362,000
Capital Expenditure -18,632,000
Unlevered Free Cash Flow 324,668,000

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