DCF Tool

WBD

Warner Bros. Discovery Inc – Radio Networks
Discovery, Inc. is a global leader in real life entertainment, serving a passionate audience of superfans around the world with content that inspires, informs and entertains. Discovery delivers over 8,000 hours of original programming each year and has category leadership across deeply loved content genres around the world. Available in more than 220 countries and territories and in nearly 50 languages, Discovery is a platform innovator, reaching viewers on all screens, including TV Everywhere products such as the GO portfolio of apps; direct-to-consumer streaming services such as Eurosport Player, Food Network Kitchen and MotorTrend OnDemand; digital-first and social content from Group Nine Media; a landmark natural history and factual content partnership with the BBC; and a strategic alliance with PGA TOUR to create the international home of golf. Discovery's portfolio of premium brands includes Discovery Channel, HGTV, Food Network, TLC, Investigation Discovery, Travel Channel, MotorTrend, Animal Planet, Science Channel, and the forthcoming multi-platform JV with Chip and Joanna Gaines, Magnolia, as well as OWN: Oprah Winfrey Network in the U.S., Discovery Kids in Latin America, and Eurosport, the leading provider of locally relevant, premium sports and Home of the Olympic Games across Europe.
Analysis Results
Intrinsic Value $72.14
Latest Price $13.69
Relative Value 81% undervalued
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Cash Flow (Billions)
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 11.3%.

Weighted Average Cost of Capital (WACC)

The calculated WACC is 3.0%. This value is used as the default discount rate.

Value of Future Flows

Assuming a growth rate of 11.3%, 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 (billion) Present value (billion)
2022 3.97 3.85
2023 4.42 4.16
2024 4.91 4.49
2025 5.47 4.85
2026 6.09 5.24
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 183 billion. This corresponds to a present value of 153 billion.

Intrinsic Value Per Share

The total present value of the projected cash flows is 22.6 billion. Adding in the terminal value gives a total present value of 175 billion.

There are presently 2.43 billion outstanding shares, so the intrinsic value per share is 72.14.

Financial Statements

The following data was to determine the past cash flows.

Current Assets 7,264,000,000
Current Cash 3,945,000,000
Current Liabilities 3,459,000,000
Current Debt 339,000,000
Non-Cash Working Capital (NCWC) 199,000,000
Change in NCWC -1,061,000,000
EBIT 1,955,000,000
Tax Provision 236,000,000
Depreciation and Amortization 1,582,000,000
Capital Expenditure -373,000,000
Unlevered Free Cash Flow 1,781,032,100
Current Assets 6,130,000,000
Current Cash 2,123,000,000
Current Liabilities 3,082,000,000
Current Debt 335,000,000
Non-Cash Working Capital (NCWC) 1,260,000,000
Change in NCWC 225,000,000
EBIT 2,625,000,000
Tax Provision 373,000,000
Depreciation and Amortization 1,359,000,000
Capital Expenditure -402,000,000
Unlevered Free Cash Flow 3,240,376,736
Current Assets 5,217,000,000
Current Cash 1,552,000,000
Current Liabilities 3,239,000,000
Current Debt 609,000,000
Non-Cash Working Capital (NCWC) 1,035,000,000
Change in NCWC -73,000,000
EBIT 3,188,000,000
Tax Provision 81,000,000
Depreciation and Amortization 1,347,000,000
Capital Expenditure -289,000,000
Unlevered Free Cash Flow 4,060,433,304
Current Assets 4,231,000,000
Current Cash 986,000,000
Current Liabilities 3,997,000,000
Current Debt 1,860,000,000
Non-Cash Working Capital (NCWC) 1,108,000,000
Change in NCWC 267,000,000
EBIT 2,537,000,000
Tax Provision 341,000,000
Depreciation and Amortization 1,398,000,000
Capital Expenditure -147,000,000
Unlevered Free Cash Flow 3,208,505,870
Current Assets 9,991,000,000
Current Cash 7,309,000,000
Current Liabilities 1,871,000,000
Current Debt 30,000,000
Non-Cash Working Capital (NCWC) 841,000,000
Change in NCWC 21,000,000
EBIT 1,908,000,000
Tax Provision 176,000,000
Depreciation and Amortization 330,000,000
Capital Expenditure -135,000,000
Unlevered Free Cash Flow 2,124,000,000
Current Assets 2,599,000,000
Current Cash 300,000,000
Current Liabilities 1,561,000,000
Current Debt 82,000,000
Non-Cash Working Capital (NCWC) 820,000,000
Change in NCWC 223,000,000
EBIT 2,015,000,000
Tax Provision 453,000,000
Depreciation and Amortization 322,000,000
Capital Expenditure -88,000,000
Unlevered Free Cash Flow 1,925,743,267
Current Assets 2,596,000,000
Current Cash 539,000,000
Current Liabilities 1,579,000,000
Current Debt 119,000,000
Non-Cash Working Capital (NCWC) 597,000,000
Change in NCWC 117,000,000
EBIT 2,053,000,000
Tax Provision 511,000,000
Depreciation and Amortization 330,000,000
Capital Expenditure -103,000,000
Unlevered Free Cash Flow 1,724,079,538
Current Assets 2,491,000,000
Current Cash 514,000,000
Current Liabilities 2,604,000,000
Current Debt 1,107,000,000
Non-Cash Working Capital (NCWC) 480,000,000
Change in NCWC -116,000,000
EBIT 2,143,000,000
Tax Provision 610,000,000
Depreciation and Amortization 329,000,000
Capital Expenditure -120,000,000
Unlevered Free Cash Flow 1,487,728,677
Current Assets 2,410,000,000
Current Cash 537,000,000
Current Liabilities 1,294,000,000
Current Debt 17,000,000
Non-Cash Working Capital (NCWC) 596,000,000
Change in NCWC 78,000,000
EBIT 2,013,000,000
Tax Provision 659,000,000
Depreciation and Amortization 276,000,000
Capital Expenditure -115,000,000
Unlevered Free Cash Flow 1,487,848,502

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