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Discounted Cash Flow (DCF) Analysis Unlevered


Applied Materials Inc.

Applied Materials Inc. (AMAT)

Technology

Operating Data

Year
A/P
2013
Actual
2014
Actual
2015
Actual
2016
Actual
2017
Actual
2018
Actual
2019
Projected
2020
Projected
2021
Projected
2022
Projected
2023
Projected
Revenue 7,509.009,072.379,659.3610,825.2414,537.2217,252.7720,439.3524,214.5028,686.9233,985.4040,262.50
Revenue (%)
EBITDA 855.281,917.902,071.932,556.924,336.455,384.594,723.535,595.976,629.557,854.029,304.66
EBITDA (%)
EBIT 445.281,543.211,701.012,168.303,929.414,927.393,957.064,687.935,553.796,579.577,794.82
EBIT (%)
Depreciation 409.99374.69370.92388.63407.04457.20766.48908.041,075.761,274.451,509.84
Depreciation (%)

Balance Sheet Data

Year
A/P
2013
Actual
2014
Actual
2015
Actual
2016
Actual
2017
Actual
2018
Actual
2019
Projected
2020
Projected
2021
Projected
2022
Projected
2023
Projected
Total Cash 1,890.773,161.724,964.913,748.787,275.884,030.257,476.728,857.6710,493.6812,431.8614,728.02
Total Cash (%)
Account Receivables 1,633.211,670.221,738.682,278.712,337.582,322.223,705.654,390.095,200.946,161.557,299.59
Account Receivables (%)
Inventories 1,413.191,566.801,833.352,050.302,930.703,721.423,942.754,670.985,533.716,555.787,766.64
Inventories (%)
Accounts Payable 1,648.981,883.421,833.352,255.982,449.522,720.763,922.314,646.765,505.026,521.807,726.37
Accounts Payable (%)
Capital Expenditure -189.98-215.92-215.40-253.31-344.53-622.82-527.34-624.73-740.12-876.82-1,038.77
Capital Expenditure (%)

Weighted Average Cost Of Capital

Share price $ 46.76
Diluted Shares Outstanding 1,026.00
Cost of Debt
Tax Rate 29.42
After-tax Cost of Debt -1.42
Risk-Free Rate
Market Risk Premium
Cost of Equity 15.48
Total Debt 5,309.00
Total Equity 47,975.76
Total Capital 53,284.76
Debt Weighting 9.96
Equity Weighting 90.04
Wacc

Build Up Free Cash

Year
A/P
2013
Actual
2014
Actual
2015
Actual
2016
Actual
2017
Actual
2018
Actual
2019
Projected
2020
Projected
2021
Projected
2022
Projected
2023
Projected
Revenue 7,509.009,072.379,659.3610,825.2414,537.2217,252.7720,439.3524,214.5028,686.9233,985.4040,262.50
EBITDA 855.281,917.902,071.932,556.924,336.455,384.594,723.535,595.976,629.557,854.029,304.66
EBIT 445.281,543.211,701.012,168.303,929.414,927.393,957.064,687.935,553.796,579.577,794.82
Tax Rate 26.86%25.97%13.83%14.51%7.96%29.42%19.76%19.76%19.76%19.76%19.76%
EBIAT 325.691,142.491,465.771,853.773,616.623,477.733,175.273,761.754,456.545,279.666,254.82
Depreciation 409.99374.69370.92388.63407.04457.20766.48908.041,075.761,274.451,509.84
Accounts Receivable --37.02-68.46-540.03-58.8715.36-1,383.43-684.43-810.85-960.61-1,138.04
Inventories --153.61-266.55-216.95-880.40-790.72-221.33-728.23-862.73-1,022.08-1,210.85
Accounts Payable -234.45-50.08422.63193.54271.241,201.55724.45858.261,016.781,204.58
Capital Expenditure -25.94-0.5237.9191.22278.29-95.4997.40115.39136.70161.95
UFCF 735.681,586.951,451.081,945.953,369.153,709.103,443.054,078.984,832.375,724.916,782.30
WACC
PV UFCF 3,012.553,122.733,236.943,355.333,478.05
SUM PV UFCF 14,634.49

Terminal Value

Growth in perpetuity method:
Long-term growth rate
WACC (%) 14.29
Free cash flow (t + 1) 7,053.59
Terminal Value 68,547.98
Present Value of Terminal Value 35,152.28

Intrinsic Value

Enterprise Value 49,786.77
Net Debt 1,278.75
Equity Value 48,508.02
Shares Outstanding 1,026.00
Equity Value Per Share 47.28

Results Unlevered DCF

Wacc / Long-term Growth -4 (%)-3 (%)-2 (%)-1 (%)0 (%)1 (%)2 (%)3 (%)4 (%)
16.29 (%) 34.84 Sell 36.51 Sell 38.41 Sell 40.60 Sell 43.15 Sell 46.14 Sell 49.72 Buy 54.07 Buy 59.47 Buy
15.79 (%) 33.72 Sell 35.26 Sell 37.01 Sell 39.02 Sell 41.33 Sell 44.04 Sell 47.25 Buy 51.12 Buy 55.86 Buy
15.29 (%) 32.68 Sell 34.11 Sell 35.72 Sell 37.56 Sell 39.67 Sell 42.13 Sell 45.02 Sell 48.47 Buy 52.67 Buy
14.79 (%) 31.72 Sell 33.04 Sell 34.52 Sell 36.21 Sell 38.14 Sell 40.38 Sell 42.99 Sell 46.09 Sell 49.83 Buy
14.29 (%) 30.81 Sell 32.04 Sell 33.41 Sell 34.97 Sell 36.74 Sell 38.78 Sell 41.15 Sell 43.94 Sell 47.28 Buy
13.79 (%) 29.96 Sell 31.10 Sell 32.38 Sell 33.81 Sell 35.44 Sell 37.31 Sell 39.47 Sell 41.99 Sell 44.99 Sell
13.29 (%) 29.17 Sell 30.23 Sell 31.41 Sell 32.74 Sell 34.24 Sell 35.96 Sell 37.93 Sell 40.22 Sell 42.91 Sell
12.79 (%) 28.42 Sell 29.41 Sell 30.51 Sell 31.74 Sell 33.13 Sell 34.71 Sell 36.51 Sell 38.59 Sell 41.03 Sell
12.29 (%) 27.72 Sell 28.65 Sell 29.67 Sell 30.81 Sell 32.10 Sell 33.55 Sell 35.20 Sell 37.11 Sell 39.32 Sell