DCF Tool

WDR

Waddell & Reed Financial, Inc. – Securities and Commodity Exchanges
Through its subsidiaries, Waddell & Reed Financial, Inc. has provided investment management and wealth management services to clients throughout the United States since 1937. Today, Waddell & Reed distributes its investment products through the unaffiliated channel under the IVY INVESTMENTSĀ® brand (encompassing broker/dealer, retirement, and registered investment advisors), its wealth management channel (through independent financial advisors associated with WADDELL & REED, INC.), and its institutional channel (including defined benefit plans, pension plans, endowments and subadvisory relationships).
Analysis Results
Intrinsic Value $27.33
Latest Price $24.98
Relative Value 9% 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 -6.4%.

Weighted Average Cost of Capital (WACC)

The calculated WACC is 8.6%. This value is used as the default discount rate.

Value of Future Flows

Assuming a growth rate of -6.4%, 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)
2021 159 146
2022 149 126
2023 139 109
2024 130 93.6
2025 122 80.7
Terminal Value

Assuming a growth rate after the projection years of 2.0%, the terminal value of the company would be 1870 million. This corresponds to a present value of 1140 million.

Intrinsic Value Per Share

The total present value of the projected cash flows is 555 million. Adding in the terminal value gives a total present value of 1700 million.

There are presently 62.0 million outstanding shares, so the intrinsic value per share is 27.33.

Financial Statements

The following data was to determine the past cash flows.

Current Assets 943,736,000
Current Cash 273,756,000
Current Liabilities 396,547,000
Current Debt 94,997,000
Non-Cash Working Capital (NCWC) 368,430,000
Change in NCWC -211,957,000
EBIT 109,013,000
Tax Provision 30,123,000
Depreciation and Amortization 12,591,000
Capital Expenditure -8,564,000
Unlevered Free Cash Flow -130,866,782
Current Assets 1,041,397,000
Current Cash 151,815,000
Current Liabilities 309,195,000
Current Debt 0
Non-Cash Working Capital (NCWC) 580,387,000
Change in NCWC 45,025,000
EBIT 164,578,000
Tax Provision 41,418,000
Depreciation and Amortization 19,970,000
Capital Expenditure -5,753,000
Unlevered Free Cash Flow 180,781,974
Current Assets 1,105,481,000
Current Cash 231,997,000
Current Liabilities 338,122,000
Current Debt 0
Non-Cash Working Capital (NCWC) 535,362,000
Change in NCWC -108,808,000
EBIT 245,953,000
Tax Provision 55,480,000
Depreciation and Amortization 28,278,000
Capital Expenditure -2,566,000
Unlevered Free Cash Flow 105,593,338
Current Assets 1,118,842,000
Current Cash 207,829,000
Current Liabilities 361,839,000
Current Debt 94,996,000
Non-Cash Working Capital (NCWC) 644,170,000
Change in NCWC 404,411,000
EBIT 258,356,000
Tax Provision 101,368,000
Depreciation and Amortization 20,983,000
Capital Expenditure -6,783,000
Unlevered Free Cash Flow 570,324,150
Current Assets 1,091,839,000
Current Cash 555,102,000
Current Liabilities 296,978,000
Current Debt 0
Non-Cash Working Capital (NCWC) 239,759,000
Change in NCWC 23,722,000
EBIT 245,379,000
Tax Provision 76,187,000
Depreciation and Amortization 18,358,000
Capital Expenditure -15,691,000
Unlevered Free Cash Flow 188,498,406
Current Assets 1,217,745,000
Current Cash 558,495,000
Current Liabilities 443,213,000
Current Debt 0
Non-Cash Working Capital (NCWC) 216,037,000
Change in NCWC 72,991,000
EBIT 410,608,000
Tax Provision 154,004,000
Depreciation and Amortization 16,050,000
Capital Expenditure -29,610,000
Unlevered Free Cash Flow 311,768,803
Current Assets 1,172,633,000
Current Cash 566,621,000
Current Liabilities 462,966,000
Current Debt 0
Non-Cash Working Capital (NCWC) 143,046,000
Change in NCWC 44,295,000
EBIT 509,105,000
Tax Provision 176,832,000
Depreciation and Amortization 14,754,000
Capital Expenditure -35,606,000
Unlevered Free Cash Flow 348,882,453
Current Assets 1,006,325,000
Current Cash 487,845,000
Current Liabilities 419,729,000
Current Debt 0
Non-Cash Working Capital (NCWC) 98,751,000
Change in NCWC -12,782,000
EBIT 404,475,000
Tax Provision 140,233,000
Depreciation and Amortization 13,681,000
Capital Expenditure -16,905,000
Unlevered Free Cash Flow 244,226,194
Current Assets 804,893,000
Current Cash 328,027,000
Current Liabilities 365,333,000
Current Debt 0
Non-Cash Working Capital (NCWC) 111,533,000
Change in NCWC 27,903,000
EBIT 312,314,000
Tax Provision 108,475,000
Depreciation and Amortization 15,093,000
Capital Expenditure -15,300,000
Unlevered Free Cash Flow 227,458,759

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