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Discounted Cash Flow (DCF) Analysis Unlevered


Twitter Inc.

Twitter Inc. (TWTR)

Technology

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 664.891,402.982,217.982,529.602,443.343,042.454,285.296,035.848,501.4811,974.3316,865.84
Revenue (%)
EBITDA -528.65-334.33-122.2161.22405.60981.80188.12264.97373.21525.67740.41
EBITDA (%)
EBIT -639.56-542.53-434.95-340.999.77556.16-455.10-641.01-902.86-1,271.67-1,791.15
EBIT (%)
Depreciation 110.90208.20312.73402.21395.82425.64643.22905.981,276.071,797.352,531.56
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 2,234.033,621.943,495.313,774.674,403.156,209.348,135.6311,459.0416,140.0522,733.2632,019.80
Total Cash (%)
Account Receivables 247.34418.51638.78650.61664.35788.601,178.031,659.252,337.063,291.744,636.42
Account Receivables (%)
Inventories -----------
Inventories (%)
Accounts Payable 27.9953.17134.19122.18171.03145.12226.69319.30449.73633.44892.20
Accounts Payable (%)
Capital Expenditure -75.73-201.61-347.34-218.56-122.90-470.97-507.38-714.64-1,006.57-1,417.76-1,996.92
Capital Expenditure (%)

Weighted Average Cost Of Capital

Share price $ 40.16
Diluted Shares Outstanding 772.69
Cost of Debt
Tax Rate -184.64
After-tax Cost of Debt 9.28
Risk-Free Rate
Market Risk Premium
Cost of Equity 6.45
Total Debt 1,755.32
Total Equity 31,031.07
Total Capital 32,786.39
Debt Weighting 5.35
Equity Weighting 94.65
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 664.891,402.982,217.982,529.602,443.343,042.454,285.296,035.848,501.4811,974.3316,865.84
EBITDA -528.65-334.33-122.2161.22405.60981.80188.12264.97373.21525.67740.41
EBIT -639.56-542.53-434.95-340.999.77556.16-455.10-641.01-902.86-1,271.67-1,791.15
Tax Rate 0.28%0.09%2.30%-3.64%-13.25%-184.64%-33.14%-33.14%-33.14%-33.14%-33.14%
EBIAT -637.76-542.04-424.94-353.4011.071,583.08-605.93-853.46-1,202.09-1,693.15-2,384.80
Depreciation 110.90208.20312.73402.21395.82425.64643.22905.981,276.071,797.352,531.56
Accounts Receivable --171.17-220.27-11.84-13.73-124.26-389.42-481.22-677.80-954.69-1,344.68
Inventories -----------
Accounts Payable -25.1881.01-12.0148.85-25.9181.5792.60130.43183.71258.76
Capital Expenditure -125.88145.73-128.78-95.66348.0736.41207.26291.93411.19579.16
UFCF -526.85-353.95-105.73-103.81346.362,206.62-234.16-128.83-181.46-255.59-360.00
WACC
PV UFCF -219.11-112.80-148.67-195.94-258.24
SUM PV UFCF 133.07

Terminal Value

Growth in perpetuity method:
Long-term growth rate
WACC (%) 6.87
Free cash flow (t + 1) -374.40
Terminal Value -13,045.26
Present Value of Terminal Value -9,357.80

Intrinsic Value

Enterprise Value -9,224.73
Net Debt -4,454.03
Equity Value -4,770.71
Shares Outstanding 772.69
Equity Value Per Share -6.17

Results Unlevered DCF

Wacc / Long-term Growth -4 (%)-3 (%)-2 (%)-1 (%)0 (%)1 (%)2 (%)3 (%)4 (%)
8.87 (%) 1.96 Sell 1.41 Sell 0.70 Sell -0.26 Sell -1.61 Sell -3.65 Sell -7.12 Sell -14.30 Sell -37.97 Sell
8.37 (%) 2.26 Sell 1.78 Sell 1.17 Sell 0.36 Sell -0.74 Sell -2.35 Sell -4.92 Sell -9.65 Sell -21.29 Sell
7.87 (%) 2.53 Sell 2.11 Sell 1.57 Sell 0.89 Sell -0.03 Sell -1.33 Sell -3.30 Sell -6.64 Sell -13.55 Sell
7.37 (%) 2.77 Sell 2.39 Sell 1.93 Sell 1.34 Sell 0.57 Sell -0.50 Sell -2.05 Sell -4.52 Sell -9.08 Sell
6.87 (%) 2.98 Sell 2.65 Sell 2.24 Sell 1.73 Sell 1.07 Sell 0.19 Sell -1.06 Sell -2.96 Sell -6.17 Sell
6.37 (%) 3.18 Sell 2.88 Sell 2.52 Sell 2.07 Sell 1.51 Sell 0.76 Sell -0.27 Sell -1.76 Sell -4.14 Sell
5.87 (%) 3.36 Sell 3.09 Sell 2.77 Sell 2.38 Sell 1.88 Sell 1.25 Sell 0.39 Sell -0.81 Sell -2.64 Sell
5.37 (%) 3.52 Sell 3.28 Sell 2.99 Sell 2.64 Sell 2.21 Sell 1.66 Sell 0.95 Sell -0.04 Sell -1.48 Sell
4.87 (%) 3.66 Sell 3.45 Sell 3.19 Sell 2.88 Sell 2.50 Sell 2.03 Sell 1.41 Sell 0.59 Sell -0.57 Sell