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Discounted Cash Flow (DCF) Analysis Unlevered


Oracle Corporation

Oracle Corporation (ORCL)

Technology

Operating Data

Year
A/P
2013
Actual
2014
Actual
2015
Actual
2016
Actual
2017
Actual
2018
Actual
2019
Actual
2020
Projected
2021
Projected
2022
Projected
2023
Projected
Revenue 37,180.0038,276.8138,227.0537,049.6637,794.3639,385.5039,507.5939,918.4740,333.6240,753.0941,176.93
Revenue (%)
EBITDA 17,627.0417,526.9516,839.0215,416.3615,930.3217,235.0917,268.7717,592.0717,775.0317,959.8918,146.67
EBITDA (%)
EBIT 14,697.2514,617.9113,979.6312,908.1013,477.4714,450.5414,349.1614,701.9714,854.8715,009.3615,165.46
EBIT (%)
Depreciation 2,929.782,909.042,859.382,508.262,452.852,784.552,919.612,890.102,920.152,950.522,981.21
Depreciation (%)

Balance Sheet Data

Year
A/P
2013
Actual
2014
Actual
2015
Actual
2016
Actual
2017
Actual
2018
Actual
2019
Actual
2020
Projected
2021
Projected
2022
Projected
2023
Projected
Total Cash 32,216.4738,820.3454,366.5156,126.5366,079.6567,262.5537,828.5252,644.4853,191.9853,745.1854,304.13
Total Cash (%)
Account Receivables 6,049.196,086.015,619.385,383.325,298.775,135.875,132.045,784.195,844.345,905.125,966.54
Account Receivables (%)
Inventories 241.67187.56313.46211.18---251.49254.10256.74259.41
Inventories (%)
Accounts Payable 420.13470.80806.59503.88597.15527.77580.76582.81588.87595.00601.18
Accounts Payable (%)
Capital Expenditure -650.65-581.81-1,391.46-1,189.29-2,022.00-1,736.90-1,659.32-1,373.20-1,387.48-1,401.91-1,416.49
Capital Expenditure (%)

Weighted Average Cost Of Capital

Share price $ 53.92
Diluted Shares Outstanding 3,732.00
Cost of Debt
Tax Rate 9.66
After-tax Cost of Debt -0.43
Risk-Free Rate
Market Risk Premium
Cost of Equity 11.10
Total Debt 51,673.00
Total Equity 201,229.44
Total Capital 252,902.44
Debt Weighting 20.43
Equity Weighting 79.57
Wacc

Build Up Free Cash

Year
A/P
2013
Actual
2014
Actual
2015
Actual
2016
Actual
2017
Actual
2018
Actual
2019
Actual
2020
Projected
2021
Projected
2022
Projected
2023
Projected
Revenue 37,180.0038,276.8138,227.0537,049.6637,794.3639,385.5039,507.5939,918.4740,333.6240,753.0941,176.93
EBITDA 17,627.0417,526.9516,839.0215,416.3615,930.3217,235.0917,268.7717,592.0717,775.0317,959.8918,146.67
EBIT 14,697.2514,617.9113,979.6312,908.1013,477.4714,450.5414,349.1614,701.9714,854.8715,009.3615,165.46
Tax Rate 21.39%20.06%22.57%22.21%19.08%71.13%9.66%26.58%26.58%26.58%26.58%
EBIAT 11,553.2811,685.5810,825.1210,041.5110,906.594,172.0912,963.1310,793.6210,905.8711,019.2911,133.89
Depreciation 2,929.782,909.042,859.382,508.262,452.852,784.552,919.612,890.102,920.152,950.522,981.21
Accounts Receivable --36.83466.64236.0684.55162.903.83-652.15-60.16-60.78-61.41
Inventories -54.11-125.91102.28211.18----2.62-2.64-2.67
Accounts Payable -50.67335.79-302.7293.28-69.3953.002.056.066.126.19
Capital Expenditure --68.84809.66-202.17832.70-285.10-77.58-286.1214.2814.4314.58
UFCF 14,483.0714,593.7415,170.6812,383.2314,581.166,765.0615,861.9912,747.4913,783.6013,926.9514,071.79
WACC
PV UFCF 10,583.1710,426.759,599.268,837.44
SUM PV UFCF 89,195.20

Terminal Value

Growth in perpetuity method:
Long-term growth rate
WACC (%) 9.75
Free cash flow (t + 1) 14,634.66
Terminal Value 254,515.79
Present Value of Terminal Value 159,842.43

Intrinsic Value

Enterprise Value 249,037.64
Net Debt 13,844.48
Equity Value 235,193.16
Shares Outstanding 3,732.00
Equity Value Per Share 63.02

Results Unlevered DCF

Wacc / Long-term Growth -4 (%)-3 (%)-2 (%)-1 (%)0 (%)1 (%)2 (%)3 (%)4 (%)
11.75 (%) 41.40 Sell 43.62 Sell 46.28 Sell 49.56 Sell 53.69 Sell 59.04 Buy 66.24 Buy 76.48 Buy 92.19 Buy
11.25 (%) 40.07 Sell 42.06 Sell 44.44 Sell 47.34 Sell 50.94 Sell 55.53 Buy 61.59 Buy 69.96 Buy 82.26 Buy
10.75 (%) 38.86 Sell 40.65 Sell 42.79 Sell 45.36 Sell 48.52 Sell 52.50 Sell 57.65 Buy 64.60 Buy 74.47 Buy
10.25 (%) 37.74 Sell 39.37 Sell 41.29 Sell 43.59 Sell 46.38 Sell 49.85 Sell 54.28 Buy 60.12 Buy 68.18 Buy
9.75 (%) 36.72 Sell 38.21 Sell 39.94 Sell 42.00 Sell 44.48 Sell 47.52 Sell 51.36 Sell 56.32 Buy 63.02 Buy
9.25 (%) 35.78 Sell 37.14 Sell 38.71 Sell 40.56 Sell 42.77 Sell 45.47 Sell 48.81 Sell 53.08 Sell 58.71 Buy
8.75 (%) 34.92 Sell 36.16 Sell 37.58 Sell 39.26 Sell 41.24 Sell 43.63 Sell 46.57 Sell 50.27 Sell 55.06 Buy
8.25 (%) 34.12 Sell 35.25 Sell 36.56 Sell 38.07 Sell 39.86 Sell 41.99 Sell 44.59 Sell 47.81 Sell 51.93 Sell
7.75 (%) 33.38 Sell 34.42 Sell 35.61 Sell 36.99 Sell 38.60 Sell 40.52 Sell 42.82 Sell 45.66 Sell 49.22 Sell