Simple Discounted Cash Flow Model

DCF Analysis
Year 1 2 3 4 5
2022E 2023E 2024E 2025E 2026E
Revenue 13.6 billion 14.28 billion 14.99 billion 15.74 billion 16.53 billion
% Growth 5% 5% 5% 5%

EBITDA 5.40 billion 5.75 billion 6.15 billion 6.55 billion 6.94 billion
% Margin 40% 40% 41% 41% 42%

Cash Taxes Calculation

EBITDA 5.40 billion 5.75 billion 6.15 billion 6.55 billion 6.94 billion
Less: Depreciation and Amortization 0.095 billion 0.1 billion 0.095 billion 0.1 billion 0.095 billion
EBIT $5.305 $5.65 $6.045 $6.44 $6.825
Cash Taxes 40.0% $2.122 $2.26 $2.418 $2.576 $2.73

Capital Expenditures

Net Working Capital $0.0 0.714 billion 0.75 billion $0.79 $0.83
Change in NWC $0.0 $0.714 $0.036 $0.04 $0.04

EBITDA 5.40 billion 5.75 billion 6.15 billion 6.55 billion 6.94 billion
Less: Cash Taxes 2.122 2.26 2.418 2.576 2.73
Less: Changes in W/C 0.0 0.7 0.8 0.79 0.8
Less: Capital Expenditures 0.1 0.1 0.1 0.1 0.1
Total Unlevered Free Cash Flow $3.2 $3.1 $3.6 $3.7 $4.0
Total Discounted Unlevered Free Cash Flow $0.9 $0.8 $0.7 $0.7 $0.6
PV of Unlevered FCF $3.0 $2.6 $2.8 $2.6 $2.7

Implied Enterprise / Equity Valuation from DCF Analysis

Forward (2026E) EBITDA 6.94 billion

Terminal Multiple 12.0x
Terminal Value 83.28 billion
Present Value of Terminal Value 57.16 billion

PV of Unlevered FCF $2.7

Plus: PV of Terminal Value 57.16 billion
Implied TEV / Present Value 59.86 billion
Plus: Cash 9.2 billion
Less: Debt 0.05 billion
Implied Equity Value 69.01 billion
Shares Outstanding 1 billion
Implied Share Price Valuation $69.01

Sensitivities

Enterprise Value ($M)

Terminal Multiple
11.5x 12.0x 12.5x 13.0x 13.5x
7.50% $X $Y $Z $A $B
8.00% $X1 $Y1 $Z1 $A1 $B1
WACC 8.50% $69.01B $70.50B $72.00B $73.50B $75.00B
9.00% $X2 $Y2 $Z2 $A2 $B2
9.50% $X3 $Y3 $Z3 $A3 $B3

Implied Share Price

Terminal Multiple
WACC /
Terminal 11.5x 12.0x 12.5x 13.0x 13.5x
Multiple
7.50% $X $Y $Z $A $B
8.00% $X1 $Y1 $Z1 $A1 $B1
WACC 8.50% $69.01 $70.50 $72.00 $73.50 $75.00
9.00% $X2 $Y2 $Z2 $A2 $B2
9.50% $X3 $Y3 $Z3 $A3 $B3