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Discounted Cash Flow (DCF) Analysis Unlevered


PayPal Holdings Inc.

PayPal Holdings Inc. (PYPL)

Financial Services

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 6,727.008,025.319,248.3710,842.7913,094.8315,451.9018,250.2421,555.3625,459.0430,069.6735,515.29
Revenue (%)
EBITDA 1,537.121,776.802,095.682,355.053,005.263,152.194,036.954,768.055,631.546,651.417,855.98
EBITDA (%)
EBIT 1,084.391,260.781,488.061,630.762,199.932,376.502,894.493,418.684,037.804,769.055,632.72
EBIT (%)
Depreciation 452.73516.03607.62724.30805.33775.691,142.471,349.371,593.741,882.362,223.26
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 4,714.285,815.947,594.7610,323.4213,406.4911,641.4615,134.9317,875.8621,113.1824,936.7829,452.83
Total Cash (%)
Account Receivables 9,639.1211,371.0612,398.3614,577.0418,525.2620,374.8825,148.8429,703.2935,082.5641,436.0148,940.07
Account Receivables (%)
Inventories -----------
Inventories (%)
Accounts Payable 10,453.0910,726.6312,405.7615,354.4719,998.4321,842.8126,125.2230,856.5036,444.6143,044.7350,840.14
Accounts Payable (%)
Capital Expenditure -390.84-491.95-696.40-669.00-666.53-820.50-1,096.84-1,295.48-1,530.09-1,807.19-2,134.47
Capital Expenditure (%)

Weighted Average Cost Of Capital

Share price $ 105.53
Diluted Shares Outstanding 1,184.00
Cost of Debt
Tax Rate 13.43
After-tax Cost of Debt -0.62
Risk-Free Rate
Market Risk Premium
Cost of Equity 10.71
Total Debt -
Total Equity 124,947.52
Total Capital 124,947.52
Debt Weighting 0.00
Equity Weighting 100.00
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 6,727.008,025.319,248.3710,842.7913,094.8315,451.9018,250.2421,555.3625,459.0430,069.6735,515.29
EBITDA 1,537.121,776.802,095.682,355.053,005.263,152.194,036.954,768.055,631.546,651.417,855.98
EBIT 1,084.391,260.781,488.061,630.762,199.932,376.502,894.493,418.684,037.804,769.055,632.72
Tax Rate 11.90%66.77%17.47%14.10%18.41%13.43%23.68%23.68%23.68%23.68%23.68%
EBIAT 955.35418.931,228.051,400.791,794.942,057.442,209.062,609.123,081.633,639.724,298.87
Depreciation 452.73516.03607.62724.30805.33775.691,142.471,349.371,593.741,882.362,223.26
Accounts Receivable --1,731.94-1,027.30-2,178.68-3,948.22-1,849.62-4,773.96-4,554.45-5,379.27-6,353.45-7,504.06
Inventories -----------
Accounts Payable -273.551,679.132,948.714,643.961,844.384,282.414,731.285,588.116,600.127,795.40
Capital Expenditure -101.11204.45-27.40-2.47153.97276.34198.64234.61277.10327.28
UFCF 1,408.07-422.332,691.952,867.713,293.542,981.853,136.334,333.955,118.836,045.857,140.75
WACC
PV UFCF 2,832.923,535.983,772.334,024.484,293.48
SUM PV UFCF 18,444.95

Terminal Value

Growth in perpetuity method:
Long-term growth rate
WACC (%) 10.71
Free cash flow (t + 1) 7,426.38
Terminal Value 110,676.30
Present Value of Terminal Value 66,545.76

Intrinsic Value

Enterprise Value 84,990.71
Net Debt -11,641.46
Equity Value 96,632.17
Shares Outstanding 1,184.00
Equity Value Per Share 81.62