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Discounted Cash Flow (DCF) Analysis Unlevered


Radian Group Inc.

Radian Group Inc. (RDN)

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 749.911,072.671,193.231,238.461,221.611,273.041,428.101,602.041,797.172,016.072,261.62
Revenue (%)
EBITDA -84.14263.55615.95635.82495.36814.75525.68589.71661.54742.11832.50
EBITDA (%)
EBIT -153.88197.58534.33564.86409.48745.62429.29481.57540.23606.03679.84
EBIT (%)
Depreciation 69.7465.9781.6270.9685.8869.1396.40108.14121.31136.08152.66
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 --1,136.79803.39492.55623.66890.56999.031,120.721,257.221,410.35
Total Cash (%)
Account Receivables 46.4285.8161.6977.6572.5678.6789.83100.77113.04126.81142.26
Account Receivables (%)
Inventories -----------
Inventories (%)
Accounts Payable -----------
Accounts Payable (%)
Capital Expenditure -6.00-18.45-25.42-35.54-28.71-25.97-28.42-31.88-35.76-40.12-45.01
Capital Expenditure (%)

Weighted Average Cost Of Capital

Share price $ 22.98
Diluted Shares Outstanding 218.55
Cost of Debt
Tax Rate 11.43
After-tax Cost of Debt -0.52
Risk-Free Rate
Market Risk Premium
Cost of Equity 15.33
Total Debt 894.06
Total Equity 5,022.35
Total Capital 5,916.40
Debt Weighting 15.11
Equity Weighting 84.89
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 749.911,072.671,193.231,238.461,221.611,273.041,428.101,602.041,797.172,016.072,261.62
EBITDA -84.14263.55615.95635.82495.36814.75525.68589.71661.54742.11832.50
EBIT -153.88197.58534.33564.86409.48745.62429.29481.57540.23606.03679.84
Tax Rate 13.78%-795.92%35.26%36.27%65.08%11.43%-105.68%-105.68%-105.68%-105.68%-105.68%
EBIAT -132.671,770.20345.91359.99143.00660.43882.97990.511,111.161,246.501,398.32
Depreciation 69.7465.9781.6270.9685.8869.1396.40108.14121.31136.08152.66
Accounts Receivable --39.3924.12-15.965.09-6.11-11.15-10.94-12.27-13.77-15.45
Inventories -----------
Accounts Payable -----------
Capital Expenditure -12.456.9710.13-6.84-2.742.453.463.884.364.89
UFCF -62.931,809.22458.62425.12227.13720.71970.661,091.171,224.081,373.171,540.42
WACC
PV UFCF 853.78844.21832.99821.93811.01
SUM PV UFCF 4,292.55

Terminal Value

Growth in perpetuity method:
Long-term growth rate
WACC (%) 13.69
Free cash flow (t + 1) 1,602.04
Terminal Value 16,532.90
Present Value of Terminal Value 8,704.38

Intrinsic Value

Enterprise Value 12,996.93
Net Debt 270.39
Equity Value 12,726.53
Shares Outstanding 218.55
Equity Value Per Share 58.23