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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 1,537.121,776.802,095.682,355.053,005.263,152.194,009.584,735.715,593.356,606.317,802.71
EBITDA (%)
EBIT 1,084.391,260.781,488.061,630.762,199.932,376.502,883.543,405.754,022.534,751.015,611.42
EBIT (%)
Depreciation 452.73516.03607.62724.30805.33775.691,126.041,329.971,570.821,855.302,191.29
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 4,714.285,815.947,594.7610,323.4213,406.4911,641.4615,603.9618,429.8421,767.4825,709.5730,365.57
Total Cash (%)
Account Receivables 9,639.1211,371.0612,398.3614,577.0418,525.2620,374.8824,948.0829,466.1834,802.5141,105.2448,549.40
Account Receivables (%)
Inventories -----------
Inventories (%)
Accounts Payable 10,453.0910,726.6312,405.7615,354.4719,998.4321,842.8125,678.0930,328.4035,820.8742,308.0349,970.01
Accounts Payable (%)
Capital Expenditure -390.84-491.95-696.40-669.00-666.53-820.50-1,104.14-1,304.10-1,540.27-1,819.22-2,148.67
Capital Expenditure (%)

Weighted Average Cost Of Capital

Share price $ 106.38
Diluted Shares Outstanding 1,203.00
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 127,975.14
Total Capital 127,975.14
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 1,537.121,776.802,095.682,355.053,005.263,152.194,009.584,735.715,593.356,606.317,802.71
EBIT 1,084.391,260.781,488.061,630.762,199.932,376.502,883.543,405.754,022.534,751.015,611.42
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 955.35418.931,228.051,400.791,794.942,057.442,200.702,599.253,069.983,625.954,282.61
Depreciation 452.73516.03607.62724.30805.33775.691,126.041,329.971,570.821,855.302,191.29
Accounts Receivable --1,731.94-1,027.30-2,178.68-3,948.22-1,849.62-4,573.20-4,518.10-5,336.33-6,302.73-7,444.16
Inventories -----------
Accounts Payable -273.551,679.132,948.714,643.961,844.383,835.284,650.305,492.476,487.167,661.98
Capital Expenditure -101.11204.45-27.40-2.47153.97283.64199.96236.17278.94329.46
UFCF 1,408.07-422.332,691.952,867.713,293.542,981.852,872.474,261.385,033.125,944.627,021.19
WACC
PV UFCF 2,594.593,476.783,709.173,957.094,221.59
SUM PV UFCF 18,173.41

Terminal Value

Growth in perpetuity method:
Long-term growth rate
WACC (%) 10.71
Free cash flow (t + 1) 7,302.03
Terminal Value 108,823.14
Present Value of Terminal Value 65,431.52

Intrinsic Value

Enterprise Value 83,604.93
Net Debt -11,641.46
Equity Value 95,246.39
Shares Outstanding 1,203.00
Equity Value Per Share 79.17

Results Unlevered DCF

Wacc / Long-term Growth -4 (%)-3 (%)-2 (%)-1 (%)0 (%)1 (%)2 (%)3 (%)4 (%)
12.71 (%) 53.82 Sell 56.63 Sell 59.96 Sell 63.98 Sell 68.92 Sell 75.14 Sell 83.22 Sell 94.13 Sell 109.66 Buy
12.21 (%) 52.09 Sell 54.63 Sell 57.63 Sell 61.21 Sell 65.58 Sell 71.00 Sell 77.93 Sell 87.10 Sell 99.78 Sell
11.71 (%) 50.50 Sell 52.81 Sell 55.52 Sell 58.73 Sell 62.60 Sell 67.36 Sell 73.36 Sell 81.15 Sell 91.67 Sell
11.21 (%) 49.03 Sell 51.14 Sell 53.59 Sell 56.48 Sell 59.94 Sell 64.15 Sell 69.38 Sell 76.06 Sell 84.90 Sell
10.71 (%) 47.69 Sell 49.61 Sell 51.84 Sell 54.45 Sell 57.55 Sell 61.29 Sell 65.88 Sell 71.66 Sell 79.17 Sell
10.21 (%) 46.44 Sell 48.20 Sell 50.24 Sell 52.60 Sell 55.39 Sell 58.72 Sell 62.78 Sell 67.83 Sell 74.27 Sell
9.71 (%) 45.28 Sell 46.91 Sell 48.77 Sell 50.92 Sell 53.43 Sell 56.42 Sell 60.03 Sell 64.46 Sell 70.04 Sell
9.21 (%) 44.21 Sell 45.71 Sell 47.41 Sell 49.37 Sell 51.65 Sell 54.34 Sell 57.56 Sell 61.48 Sell 66.34 Sell
8.71 (%) 43.22 Sell 44.60 Sell 46.16 Sell 47.95 Sell 50.03 Sell 52.46 Sell 55.34 Sell 58.82 Sell 63.10 Sell