Discounted Cash Flow (DCF) Analysis Unlevered
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 | 664.89 | 1,402.98 | 2,217.98 | 2,529.60 | 2,443.34 | 3,042.45 | 4,285.29 | 6,035.84 | 8,501.48 | 11,974.33 | 16,865.84 |
|---|---|---|---|---|---|---|---|---|---|---|---|
| Revenue (%) | |||||||||||
| EBITDA | -528.65 | -334.33 | -122.21 | 61.22 | 405.60 | 981.80 | 188.12 | 264.97 | 373.21 | 525.67 | 740.41 |
| EBITDA (%) | |||||||||||
| EBIT | -639.56 | -542.53 | -434.95 | -340.99 | 9.77 | 556.16 | -455.10 | -641.01 | -902.86 | -1,271.67 | -1,791.15 |
| EBIT (%) | |||||||||||
| Depreciation | 110.90 | 208.20 | 312.73 | 402.21 | 395.82 | 425.64 | 643.22 | 905.98 | 1,276.07 | 1,797.35 | 2,531.56 |
| 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 | 2,234.03 | 3,621.94 | 3,495.31 | 3,774.67 | 4,403.15 | 6,209.34 | 8,135.63 | 11,459.04 | 16,140.05 | 22,733.26 | 32,019.80 |
|---|---|---|---|---|---|---|---|---|---|---|---|
| Total Cash (%) | |||||||||||
| Account Receivables | 247.34 | 418.51 | 638.78 | 650.61 | 664.35 | 788.60 | 1,178.03 | 1,659.25 | 2,337.06 | 3,291.74 | 4,636.42 |
| Account Receivables (%) | |||||||||||
| Inventories | - | - | - | - | - | - | - | - | - | - | - |
| Inventories (%) | |||||||||||
| Accounts Payable | 27.99 | 53.17 | 134.19 | 122.18 | 171.03 | 145.12 | 226.69 | 319.30 | 449.73 | 633.44 | 892.20 |
| 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 | 664.89 | 1,402.98 | 2,217.98 | 2,529.60 | 2,443.34 | 3,042.45 | 4,285.29 | 6,035.84 | 8,501.48 | 11,974.33 | 16,865.84 |
|---|---|---|---|---|---|---|---|---|---|---|---|
| EBITDA | -528.65 | -334.33 | -122.21 | 61.22 | 405.60 | 981.80 | 188.12 | 264.97 | 373.21 | 525.67 | 740.41 |
| EBIT | -639.56 | -542.53 | -434.95 | -340.99 | 9.77 | 556.16 | -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 | -353.40 | 11.07 | 1,583.08 | -605.93 | -853.46 | -1,202.09 | -1,693.15 | -2,384.80 |
| Depreciation | 110.90 | 208.20 | 312.73 | 402.21 | 395.82 | 425.64 | 643.22 | 905.98 | 1,276.07 | 1,797.35 | 2,531.56 |
| 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 | - | 25.18 | 81.01 | -12.01 | 48.85 | -25.91 | 81.57 | 92.60 | 130.43 | 183.71 | 258.76 |
| Capital Expenditure | - | 125.88 | 145.73 | -128.78 | -95.66 | 348.07 | 36.41 | 207.26 | 291.93 | 411.19 | 579.16 |
| UFCF | -526.85 | -353.95 | -105.73 | -103.81 | 346.36 | 2,206.62 | -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 |