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Discounted Cash Flow (DCF) Analysis Unlevered


Activision Blizzard Inc

Activision Blizzard Inc (ATVI)

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 4,583.004,407.934,664.036,608.007,017.037,499.808,351.039,298.8710,354.3011,529.5112,838.11
Revenue (%)
EBITDA 1,479.851,273.011,414.132,148.922,185.102,456.942,615.542,912.413,242.973,611.044,020.90
EBITDA (%)
EBIT 1,371.691,183.091,318.991,319.621,297.451,947.702,081.082,317.282,580.292,873.153,199.26
EBIT (%)
Depreciation 108.1689.9295.15829.30887.65509.24534.47595.13662.68737.89821.64
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 4,443.224,857.981,823.173,245.194,713.344,224.645,829.866,491.547,228.338,048.758,962.28
Total Cash (%)
Account Receivables 510.09658.99679.08732.17917.831,034.971,093.991,218.151,356.411,510.371,681.79
Account Receivables (%)
Inventories 170.95122.98127.7948.9046.3142.75156.16173.89193.63215.60240.07
Inventories (%)
Accounts Payable 355.18324.86284.04222.03322.78252.74452.63504.00561.20624.90695.83
Accounts Payable (%)
Capital Expenditure -73.79-107.11-111.00-136.12-155.08-131.25-172.87-192.49-214.33-238.66-265.75
Capital Expenditure (%)

Weighted Average Cost Of Capital

Share price $ 53.94
Diluted Shares Outstanding 762.00
Cost of Debt
Tax Rate 3.41
After-tax Cost of Debt -0.12
Risk-Free Rate
Market Risk Premium
Cost of Equity 9.09
Total Debt 2,671.00
Total Equity 41,102.28
Total Capital 43,773.28
Debt Weighting 6.10
Equity Weighting 93.90
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 4,583.004,407.934,664.036,608.007,017.037,499.808,351.039,298.8710,354.3011,529.5112,838.11
EBITDA 1,479.851,273.011,414.132,148.922,185.102,456.942,615.542,912.413,242.973,611.044,020.90
EBIT 1,371.691,183.091,318.991,319.621,297.451,947.702,081.082,317.282,580.292,873.153,199.26
Tax Rate 23.43%14.88%20.43%12.66%76.28%3.41%25.18%25.18%25.18%25.18%25.18%
EBIAT 1,050.351,007.011,049.541,152.58307.741,881.291,557.041,733.761,930.542,149.662,393.65
Depreciation 108.1689.9295.15829.30887.65509.24534.47595.13662.68737.89821.64
Accounts Receivable --148.90-20.10-53.08-185.66-117.15-59.01-124.17-138.26-153.95-171.43
Inventories -47.96-4.8178.902.593.56-113.42-17.72-19.74-21.98-24.47
Accounts Payable --30.32-40.82-62.01100.75-70.04199.8851.3757.2063.7070.93
Capital Expenditure -33.333.8925.1218.95-23.8341.6219.6221.8524.3327.09
UFCF 1,158.51999.011,082.841,970.801,132.022,183.072,160.582,257.992,514.272,799.643,117.40
WACC
PV UFCF 1,985.281,906.451,950.591,995.762,041.97
SUM PV UFCF 12,155.00

Terminal Value

Growth in perpetuity method:
Long-term growth rate
WACC (%) 8.83
Free cash flow (t + 1) 3,242.10
Terminal Value 67,124.17
Present Value of Terminal Value 43,967.90

Intrinsic Value

Enterprise Value 56,122.90
Net Debt -1,553.64
Equity Value 57,676.54
Shares Outstanding 762.00
Equity Value Per Share 75.69