Discounted Cash Flow (DCF) Analysis Unlevered

Paycom Software Inc. (PAYC)
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 | 107.60 | 150.93 | 224.66 | 329.15 | 433.07 | 566.36 | 790.59 | 1,103.58 | 1,540.49 | 2,150.37 | 3,001.70 |
---|---|---|---|---|---|---|---|---|---|---|---|
Revenue (%) | |||||||||||
EBITDA | 16.15 | 20.24 | 44.37 | 115.66 | 148.02 | 205.14 | 202.55 | 282.74 | 394.67 | 550.92 | 769.03 |
EBITDA (%) | |||||||||||
EBIT | 10.66 | 13.07 | 34.96 | 102.04 | 128.62 | 175.46 | 165.79 | 231.42 | 323.04 | 450.93 | 629.46 |
EBIT (%) | |||||||||||
Depreciation | 5.49 | 7.17 | 9.41 | 13.63 | 19.40 | 29.68 | 36.76 | 51.32 | 71.63 | 99.99 | 139.58 |
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 | 13.73 | 25.51 | 50.71 | 60.17 | 46.08 | 45.71 | 117.56 | 164.10 | 229.07 | 319.76 | 446.35 |
---|---|---|---|---|---|---|---|---|---|---|---|
Total Cash (%) | |||||||||||
Account Receivables | 1.70 | 2.79 | 2.36 | 1.35 | 1.56 | 3.40 | 7.75 | 10.82 | 15.10 | 21.07 | 29.42 |
Account Receivables (%) | |||||||||||
Inventories | 0.58 | 0.20 | 1.10 | 0.69 | 1.00 | 0.79 | 2.29 | 3.20 | 4.47 | 6.24 | 8.70 |
Inventories (%) | |||||||||||
Accounts Payable | 5.02 | 3.05 | 4.90 | 3.75 | 6.50 | 6.29 | 16.60 | 23.18 | 32.35 | 45.16 | 63.04 |
Accounts Payable (%) | |||||||||||
Capital Expenditure | -16.91 | -14.26 | -16.56 | -43.51 | -59.37 | -59.92 | -92.34 | -128.90 | -179.93 | -251.16 | -350.60 |
Capital Expenditure (%) |
Weighted Average Cost Of Capital
Share price | $ 268.71 |
---|---|
Diluted Shares Outstanding | 57.71 |
Cost of Debt | |
Tax Rate | 21.55 |
After-tax Cost of Debt | -1.03 |
Risk-Free Rate | |
Market Risk Premium | |
Cost of Equity | 16.64 |
Total Debt | 32.61 |
Total Equity | 15,507.61 |
Total Capital | 15,540.22 |
Debt Weighting | 0.21 |
Equity Weighting | 99.79 |
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 | 107.60 | 150.93 | 224.66 | 329.15 | 433.07 | 566.36 | 790.59 | 1,103.58 | 1,540.49 | 2,150.37 | 3,001.70 |
---|---|---|---|---|---|---|---|---|---|---|---|
EBITDA | 16.15 | 20.24 | 44.37 | 115.66 | 148.02 | 205.14 | 202.55 | 282.74 | 394.67 | 550.92 | 769.03 |
EBIT | 10.66 | 13.07 | 34.96 | 102.04 | 128.62 | 175.46 | 165.79 | 231.42 | 323.04 | 450.93 | 629.46 |
Tax Rate | 56.86% | 41.35% | 37.52% | 30.28% | 3.32% | 21.55% | 31.81% | 31.81% | 31.81% | 31.81% | 31.81% |
EBIAT | 4.60 | 7.67 | 21.84 | 71.14 | 124.35 | 137.65 | 113.04 | 157.79 | 220.27 | 307.47 | 429.20 |
Depreciation | 5.49 | 7.17 | 9.41 | 13.63 | 19.40 | 29.68 | 36.76 | 51.32 | 71.63 | 99.99 | 139.58 |
Accounts Receivable | - | -1.09 | 0.43 | 1.01 | -0.21 | -1.84 | -4.35 | -3.07 | -4.28 | -5.98 | -8.34 |
Inventories | - | 0.38 | -0.90 | 0.41 | -0.30 | 0.20 | -1.50 | -0.91 | -1.27 | -1.77 | -2.47 |
Accounts Payable | - | -1.98 | 1.85 | -1.15 | 2.74 | -0.21 | 10.32 | 6.57 | 9.18 | 12.81 | 17.88 |
Capital Expenditure | - | -2.65 | 2.29 | 26.96 | 15.86 | 0.55 | 32.42 | 36.56 | 51.03 | 71.23 | 99.44 |
UFCF | 10.09 | 9.50 | 34.93 | 111.99 | 161.84 | 166.03 | 186.69 | 248.27 | 346.56 | 483.76 | 675.28 |
WACC | |||||||||||
PV UFCF | 160.08 | 182.55 | 218.50 | 261.54 | 313.05 | ||||||
SUM PV UFCF | 690.70 |
Terminal Value
Growth in perpetuity method: | |
---|---|
Long-term growth rate | |
WACC (%) | 16.62 |
Free cash flow (t + 1) | 702.29 |
Terminal Value | 5,564.88 |
Present Value of Terminal Value | 2,579.83 |
Intrinsic Value
Enterprise Value | 3,270.53 |
---|---|
Net Debt | -13.09 |
Equity Value | 3,283.62 |
Shares Outstanding | 57.71 |
Equity Value Per Share | 56.90 |