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Discounted Cash Flow (DCF) Analysis Unlevered


Hewlett Packard Enterprise Company

Hewlett Packard Enterprise Company (HPE)

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 57,371.0055,122.0631,077.8230,282.2228,874.1030,854.8627,898.9725,226.2522,809.5720,624.4218,648.60
Revenue (%)
EBITDA 7,659.036,757.965,951.408,091.413,822.933,292.214,435.944,010.973,626.723,279.282,965.13
EBITDA (%)
EBIT 3,264.412,612.792,004.524,315.22770.94715.831,679.521,518.621,373.141,241.591,122.65
EBIT (%)
Depreciation 4,394.624,145.183,946.883,776.193,051.992,576.382,756.422,492.352,253.592,037.691,842.48
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 2,180.102,320.649,842.3412,988.059,580.434,881.246,118.245,532.125,002.144,522.934,089.64
Total Cash (%)
Account Receivables 19,632.3617,898.1322,332.5216,988.3319,051.1318,019.2414,833.8813,412.8012,127.8510,966.009,915.46
Account Receivables (%)
Inventories 2,076.831,885.172,197.201,720.032,315.702,446.791,662.781,503.481,359.451,229.221,111.46
Inventories (%)
Accounts Payable 4,337.254,889.335,827.094,945.096,072.226,090.754,290.863,879.803,508.113,172.042,868.15
Accounts Payable (%)
Capital Expenditure -2,128.46-3,015.18-2,964.82-2,831.39-2,457.19-1,860.55-1,980.83-1,791.06-1,619.48-1,464.33-1,324.05
Capital Expenditure (%)

Weighted Average Cost Of Capital

Share price $ 15.79
Diluted Shares Outstanding 1,529.00
Cost of Debt
Tax Rate -1,063.41
After-tax Cost of Debt 53.22
Risk-Free Rate
Market Risk Premium
Cost of Equity 15.14
Total Debt 10,136.00
Total Equity 24,142.91
Total Capital 34,278.91
Debt Weighting 29.57
Equity Weighting 70.43
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 57,371.0055,122.0631,077.8230,282.2228,874.1030,854.8627,898.9725,226.2522,809.5720,624.4218,648.60
EBITDA 7,659.036,757.965,951.408,091.413,822.933,292.214,435.944,010.973,626.723,279.282,965.13
EBIT 3,264.412,612.792,004.524,315.22770.94715.831,679.521,518.621,373.141,241.591,122.65
Tax Rate 28.56%26.56%-40.15%16.46%-91.11%-1,063.41%-187.18%-187.18%-187.18%-187.18%-187.18%
EBIAT 2,332.051,918.842,809.293,604.761,473.358,328.104,823.264,361.193,943.393,565.623,224.03
Depreciation 4,394.624,145.183,946.883,776.193,051.992,576.382,756.422,492.352,253.592,037.691,842.48
Accounts Receivable -1,734.22-4,434.395,344.19-2,062.801,031.893,185.361,421.091,284.951,161.851,050.54
Inventories -191.66-312.03477.17-595.67-131.09784.01159.29144.03130.24117.76
Accounts Payable -552.08937.76-882.001,127.1418.53-1,799.89-411.06-371.68-336.08-303.88
Capital Expenditure -886.71-50.35-133.44-374.20-596.64120.28-189.76-171.58-155.15-140.28
UFCF 6,726.669,428.692,897.1712,186.872,619.8011,227.189,869.447,833.107,082.696,404.175,790.65
WACC
PV UFCF 7,718.944,791.423,388.402,396.201,694.55
SUM PV UFCF 24,885.55

Terminal Value

Growth in perpetuity method:
Long-term growth rate
WACC (%) 27.86
Free cash flow (t + 1) 6,022.27
Terminal Value 25,240.04
Present Value of Terminal Value 7,386.12

Intrinsic Value

Enterprise Value 32,271.67
Net Debt 5,254.76
Equity Value 27,016.91
Shares Outstanding 1,529.00
Equity Value Per Share 17.67