DCF Tool

TDS

Telephone And Data Systems, Inc. – Wireless Telecommunications Carriers (except Satellite)
Telephone and Data Systems, Inc. (TDS), a Fortune 1000® company, provides wireless; cable and wireline broadband, video and voice; and hosted and managed services to approximately 6 million connections nationwide through its businesses, UScellular, TDS Telecom, BendBroadband and OneNeck IT Solutions. Founded in 1969 and headquartered in Chicago, TDS employed 9,300 people as of September 30, 2020.
Analysis Results
Intrinsic Value $49.30
Latest Price $10.42
Relative Value 79% undervalued
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Cash Flow (Millions)
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 2.0%.

Weighted Average Cost of Capital (WACC)

The calculated WACC is 6.6%. This value is used as the default discount rate.

Value of Future Flows

Assuming a growth rate of 2.0%, 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)
2022 253 237
2023 258 227
2024 263 217
2025 269 208
2026 274 199
Terminal Value

Assuming a growth rate after the projection years of 2.0%, the terminal value of the company would be 6080 million. This corresponds to a present value of 4150 million.

Intrinsic Value Per Share

The total present value of the projected cash flows is 1090 million. Adding in the terminal value gives a total present value of 5240 million.

There are presently 106.0 million outstanding shares, so the intrinsic value per share is 49.3.

Financial Statements

The following data was to determine the past cash flows.

Current Assets 2,044,000,000
Current Cash 367,000,000
Current Liabilities 1,180,000,000
Current Debt 6,000,000
Non-Cash Working Capital (NCWC) 503,000,000
Change in NCWC 57,000,000
EBIT 467,000,000
Tax Provision 33,000,000
Depreciation and Amortization 895,000,000
Capital Expenditure -1,131,000,000
Unlevered Free Cash Flow 218,266,968
Current Assets 3,026,000,000
Current Cash 1,432,000,000
Current Liabilities 1,153,000,000
Current Debt 5,000,000
Non-Cash Working Capital (NCWC) 446,000,000
Change in NCWC -58,000,000
EBIT 462,000,000
Tax Provision 19,000,000
Depreciation and Amortization 909,000,000
Capital Expenditure -1,338,000,000
Unlevered Free Cash Flow -55,479,166
Current Assets 1,921,000,000
Current Cash 465,000,000
Current Liabilities 962,000,000
Current Debt 10,000,000
Non-Cash Working Capital (NCWC) 504,000,000
Change in NCWC -30,000,000
EBIT 358,000,000
Tax Provision 64,000,000
Depreciation and Amortization 932,000,000
Capital Expenditure -957,000,000
Unlevered Free Cash Flow 194,412,322
Current Assets 2,330,000,000
Current Cash 938,000,000
Current Liabilities 879,000,000
Current Debt 21,000,000
Non-Cash Working Capital (NCWC) 534,000,000
Change in NCWC 185,000,000
EBIT 356,000,000
Tax Provision 46,000,000
Depreciation and Amortization 883,000,000
Capital Expenditure -776,000,000
Unlevered Free Cash Flow 573,900,452
Current Assets 1,966,000,000
Current Cash 719,000,000
Current Liabilities 918,000,000
Current Debt 20,000,000
Non-Cash Working Capital (NCWC) 349,000,000
Change in NCWC 65,000,000
EBIT 292,000,000
Tax Provision -279,000,000
Depreciation and Amortization 844,000,000
Capital Expenditure -685,000,000
Unlevered Free Cash Flow 516,000,000
Current Assets 2,059,000,000
Current Cash 900,000,000
Current Liabilities 887,000,000
Current Debt 12,000,000
Non-Cash Working Capital (NCWC) 284,000,000
Change in NCWC 40,378,000
EBIT 206,000,000
Tax Provision 40,000,000
Depreciation and Amortization 850,000,000
Capital Expenditure -636,000,000
Unlevered Free Cash Flow 370,812,782
Current Assets 2,158,343,000
Current Cash 984,643,000
Current Liabilities 944,384,000
Current Debt 14,306,000
Non-Cash Working Capital (NCWC) 243,622,000
Change in NCWC 11,016,000
EBIT 276,552,000
Tax Provision 171,992,000
Depreciation and Amortization 844,361,000
Capital Expenditure -800,628,000
Unlevered Free Cash Flow 221,856,654
Current Assets 1,766,955,000
Current Cash 471,901,000
Current Liabilities 1,063,256,000
Current Debt 808,000
Non-Cash Working Capital (NCWC) 232,606,000
Change in NCWC 215,497,000
EBIT -72,405,000
Tax Provision -4,932,000
Depreciation and Amortization 836,532,000
Capital Expenditure -799,496,000
Unlevered Free Cash Flow 180,128,000
Current Assets 2,087,337,000
Current Cash 880,118,000
Current Liabilities 1,191,756,000
Current Debt 1,646,000
Non-Cash Working Capital (NCWC) 17,109,000
Change in NCWC 33,228,000
EBIT -157,221,000
Tax Provision 126,043,000
Depreciation and Amortization 1,018,077,000
Capital Expenditure -883,797,000
Unlevered Free Cash Flow 77,951,876
Current Assets 1,763,437,000
Current Cash 856,181,000
Current Liabilities 924,608,000
Current Debt 1,233,000
Non-Cash Working Capital (NCWC) -16,119,000
Change in NCWC -39,627,000
EBIT 318,047,000
Tax Provision 73,582,000
Depreciation and Amortization 813,626,000
Capital Expenditure -995,517,000
Unlevered Free Cash Flow -22,728,697

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