Discounted Cash Flow (DCF) Analysis Unlevered
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 | 4,583.00 | 4,407.93 | 4,664.03 | 6,608.00 | 7,017.03 | 7,499.80 | 8,351.03 | 9,298.87 | 10,354.30 | 11,529.51 | 12,838.11 |
|---|---|---|---|---|---|---|---|---|---|---|---|
| Revenue (%) | |||||||||||
| EBITDA | 1,479.85 | 1,273.01 | 1,414.13 | 2,148.92 | 2,185.10 | 2,456.94 | 2,615.54 | 2,912.41 | 3,242.97 | 3,611.04 | 4,020.90 |
| EBITDA (%) | |||||||||||
| EBIT | 1,371.69 | 1,183.09 | 1,318.99 | 1,319.62 | 1,297.45 | 1,947.70 | 2,081.08 | 2,317.28 | 2,580.29 | 2,873.15 | 3,199.26 |
| EBIT (%) | |||||||||||
| Depreciation | 108.16 | 89.92 | 95.15 | 829.30 | 887.65 | 509.24 | 534.47 | 595.13 | 662.68 | 737.89 | 821.64 |
| 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 | 4,443.22 | 4,857.98 | 1,823.17 | 3,245.19 | 4,713.34 | 4,224.64 | 5,829.86 | 6,491.54 | 7,228.33 | 8,048.75 | 8,962.28 |
|---|---|---|---|---|---|---|---|---|---|---|---|
| Total Cash (%) | |||||||||||
| Account Receivables | 510.09 | 658.99 | 679.08 | 732.17 | 917.83 | 1,034.97 | 1,093.99 | 1,218.15 | 1,356.41 | 1,510.37 | 1,681.79 |
| Account Receivables (%) | |||||||||||
| Inventories | 170.95 | 122.98 | 127.79 | 48.90 | 46.31 | 42.75 | 156.16 | 173.89 | 193.63 | 215.60 | 240.07 |
| Inventories (%) | |||||||||||
| Accounts Payable | 355.18 | 324.86 | 284.04 | 222.03 | 322.78 | 252.74 | 452.63 | 504.00 | 561.20 | 624.90 | 695.83 |
| 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 | $ 49.31 |
|---|---|
| Diluted Shares Outstanding | 771.00 |
| 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 | 38,018.01 |
| Total Capital | 40,689.01 |
| Debt Weighting | 6.56 |
| Equity Weighting | 93.44 |
| 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 | 4,583.00 | 4,407.93 | 4,664.03 | 6,608.00 | 7,017.03 | 7,499.80 | 8,351.03 | 9,298.87 | 10,354.30 | 11,529.51 | 12,838.11 |
|---|---|---|---|---|---|---|---|---|---|---|---|
| EBITDA | 1,479.85 | 1,273.01 | 1,414.13 | 2,148.92 | 2,185.10 | 2,456.94 | 2,615.54 | 2,912.41 | 3,242.97 | 3,611.04 | 4,020.90 |
| EBIT | 1,371.69 | 1,183.09 | 1,318.99 | 1,319.62 | 1,297.45 | 1,947.70 | 2,081.08 | 2,317.28 | 2,580.29 | 2,873.15 | 3,199.26 |
| 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 | 1,050.35 | 1,007.01 | 1,049.54 | 1,152.58 | 307.74 | 1,881.29 | 1,557.04 | 1,733.76 | 1,930.54 | 2,149.66 | 2,393.65 |
| Depreciation | 108.16 | 89.92 | 95.15 | 829.30 | 887.65 | 509.24 | 534.47 | 595.13 | 662.68 | 737.89 | 821.64 |
| 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 | -4.81 | 78.90 | 2.59 | 3.56 | -113.42 | -17.72 | -19.74 | -21.98 | -24.47 |
| Accounts Payable | - | -30.32 | -40.82 | -62.01 | 100.75 | -70.04 | 199.88 | 51.37 | 57.20 | 63.70 | 70.93 |
| Capital Expenditure | - | 33.33 | 3.89 | 25.12 | 18.95 | -23.83 | 41.62 | 19.62 | 21.85 | 24.33 | 27.09 |
| UFCF | 1,158.51 | 999.01 | 1,082.84 | 1,970.80 | 1,132.02 | 2,183.07 | 2,160.58 | 2,257.99 | 2,514.27 | 2,799.64 | 3,117.40 |
| WACC | |||||||||||
| PV UFCF | 1,985.64 | 1,907.15 | 1,951.67 | 1,997.23 | 2,043.85 | ||||||
| SUM PV UFCF | 12,169.00 |
Terminal Value
| Growth in perpetuity method: | |
|---|---|
| Long-term growth rate | |
| WACC (%) | 8.81 |
| Free cash flow (t + 1) | 3,242.10 |
| Terminal Value | 67,403.27 |
| Present Value of Terminal Value | 44,191.31 |
Intrinsic Value
| Enterprise Value | 56,360.31 |
|---|---|
| Net Debt | -1,553.64 |
| Equity Value | 57,913.95 |
| Shares Outstanding | 771.00 |
| Equity Value Per Share | 75.12 |