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Discounted Cash Flow (DCF) Analysis Unlevered


Centene Corporation

Centene Corporation (CNC)

Healthcare

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 10,863.0016,559.5622,759.4640,605.1448,381.0360,113.4385,565.46121,793.87173,361.39246,762.61351,241.89
Revenue (%)
EBITDA 366.08591.18848.931,656.691,770.752,212.173,148.814,482.016,379.709,080.8612,925.70
EBITDA (%)
EBIT 298.73501.75737.411,380.571,407.891,719.242,592.633,690.355,252.857,476.9110,642.63
EBIT (%)
Depreciation 67.3589.42111.52276.11362.86492.93556.18791.661,126.851,603.962,283.07
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 1,139.531,786.781,936.834,434.084,601.046,065.458,599.3312,240.2817,422.8224,799.6435,299.81
Total Cash (%)
Account Receivables 429.09912.431,279.083,215.933,410.865,151.725,510.427,843.5311,164.4715,891.5122,619.98
Account Receivables (%)
Inventories -----------
Inventories (%)
Accounts Payable 337.84768.36976.383,764.104,165.614,051.655,228.057,441.6110,592.3815,077.2021,460.88
Accounts Payable (%)
Capital Expenditure -68.44-102.67-150.21-304.54-420.91-673.27-667.41-949.99-1,352.22-1,924.75-2,739.69
Capital Expenditure (%)

Weighted Average Cost Of Capital

Share price $ 60.05
Diluted Shares Outstanding 410.71
Cost of Debt
Tax Rate 34.50
After-tax Cost of Debt -1.67
Risk-Free Rate
Market Risk Premium
Cost of Equity 12.37
Total Debt 6,648.00
Total Equity 24,663.18
Total Capital 31,311.18
Debt Weighting 21.23
Equity Weighting 78.77
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 10,863.0016,559.5622,759.4640,605.1448,381.0360,113.4385,565.46121,793.87173,361.39246,762.61351,241.89
EBITDA 366.08591.18848.931,656.691,770.752,212.173,148.814,482.016,379.709,080.8612,925.70
EBIT 298.73501.75737.411,380.571,407.891,719.242,592.633,690.355,252.857,476.9110,642.63
Tax Rate 39.34%41.97%48.85%51.59%28.25%34.50%40.75%40.75%40.75%40.75%40.75%
EBIAT 181.22291.17377.20668.291,010.171,126.141,536.152,186.563,112.354,430.116,305.82
Depreciation 67.3589.42111.52276.11362.86492.93556.18791.661,126.851,603.962,283.07
Accounts Receivable --483.34-366.65-1,936.85-194.94-1,740.86-358.69-2,333.11-3,320.95-4,727.04-6,728.47
Inventories -----------
Accounts Payable -430.52208.022,787.72401.51-113.961,176.402,213.563,150.784,484.816,383.68
Capital Expenditure -34.2347.54154.33116.38252.36-5.86282.58402.23572.53814.94
UFCF 248.57362.00377.641,949.601,695.9716.612,904.183,141.254,471.256,364.389,059.05
WACC
PV UFCF 2,629.642,575.433,319.324,278.095,513.80
SUM PV UFCF 13,248.49

Terminal Value

Growth in perpetuity method:
Long-term growth rate
WACC (%) 10.44
Free cash flow (t + 1) 9,421.41
Terminal Value 146,295.24
Present Value of Terminal Value 89,042.68

Intrinsic Value

Enterprise Value 102,291.17
Net Debt 582.55
Equity Value 101,708.62
Shares Outstanding 410.71
Equity Value Per Share 247.64