Discounted Cash Flow (DCF) Analysis Unlevered
Zynga Inc. (ZNGA)
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 | 873.27 | 690.40 | 764.69 | 741.37 | 861.32 | 907.14 | 922.20 | 937.51 | 953.07 | 968.90 | 984.98 |
|---|---|---|---|---|---|---|---|---|---|---|---|
| Revenue (%) | |||||||||||
| EBITDA | 64.19 | -150.30 | -75.86 | -62.94 | 67.87 | 68.49 | -26.74 | -27.19 | -27.64 | -28.10 | -28.56 |
| EBITDA (%) | |||||||||||
| EBIT | -64.88 | -233.22 | -130.15 | -104.68 | 37.55 | 26.40 | -100.06 | -101.72 | -103.41 | -105.13 | -106.87 |
| EBIT (%) | |||||||||||
| Depreciation | 129.07 | 82.92 | 54.29 | 41.74 | 30.32 | 42.09 | 73.32 | 74.53 | 75.77 | 77.03 | 78.31 |
| 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 | 1,128.96 | 964.56 | 988.44 | 861.69 | 714.21 | 616.22 | 1,022.63 | 1,039.61 | 1,056.86 | 1,074.41 | 1,092.24 |
|---|---|---|---|---|---|---|---|---|---|---|---|
| Total Cash (%) | |||||||||||
| Account Receivables | 65.67 | 89.61 | 79.60 | 77.25 | 103.70 | 91.62 | 97.57 | 99.19 | 100.84 | 102.51 | 104.21 |
| Account Receivables (%) | |||||||||||
| Inventories | - | - | - | - | - | - | - | - | - | - | - |
| Inventories (%) | |||||||||||
| Accounts Payable | 20.96 | 14.98 | 29.67 | 24.02 | 18.95 | 26.85 | 25.91 | 26.34 | 26.78 | 27.23 | 27.68 |
| Accounts Payable (%) | |||||||||||
| Capital Expenditure | -4.72 | -4.14 | -7.04 | -7.12 | -9.73 | -11.43 | -8.30 | -8.44 | -8.58 | -8.72 | -8.86 |
| Capital Expenditure (%) |
Weighted Average Cost Of Capital
| Share price | $ 5.57 |
|---|---|
| Diluted Shares Outstanding | 889.58 |
| Cost of Debt | |
| Tax Rate | 41.59 |
| After-tax Cost of Debt | -2.03 |
| Risk-Free Rate | |
| Market Risk Premium | |
| Cost of Equity | 5.63 |
| Total Debt | - |
| Total Equity | 4,954.98 |
| Total Capital | 4,954.98 |
| 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 | 873.27 | 690.40 | 764.69 | 741.37 | 861.32 | 907.14 | 922.20 | 937.51 | 953.07 | 968.90 | 984.98 |
|---|---|---|---|---|---|---|---|---|---|---|---|
| EBITDA | 64.19 | -150.30 | -75.86 | -62.94 | 67.87 | 68.49 | -26.74 | -27.19 | -27.64 | -28.10 | -28.56 |
| EBIT | -64.88 | -233.22 | -130.15 | -104.68 | 37.55 | 26.40 | -100.06 | -101.72 | -103.41 | -105.13 | -106.87 |
| Tax Rate | 42.99% | 3.14% | 6.66% | -3.29% | 29.12% | 41.59% | 20.04% | 20.04% | 20.04% | 20.04% | 20.04% |
| EBIAT | -36.99 | -225.89 | -121.48 | -108.12 | 26.62 | 15.42 | -80.01 | -81.34 | -82.69 | -84.06 | -85.46 |
| Depreciation | 129.07 | 82.92 | 54.29 | 41.74 | 30.32 | 42.09 | 73.32 | 74.53 | 75.77 | 77.03 | 78.31 |
| Accounts Receivable | - | -23.94 | 10.01 | 2.35 | -26.45 | 12.08 | -5.95 | -1.62 | -1.65 | -1.67 | -1.70 |
| Inventories | - | - | - | - | - | - | - | - | - | - | - |
| Accounts Payable | - | -5.98 | 14.69 | -5.65 | -5.07 | 7.90 | -0.94 | 0.43 | 0.44 | 0.44 | 0.45 |
| Capital Expenditure | - | -0.57 | 2.89 | 0.08 | 2.62 | 1.70 | -3.13 | 0.14 | 0.14 | 0.14 | 0.14 |
| UFCF | 92.08 | -173.47 | -39.60 | -69.60 | 28.03 | 79.19 | -16.71 | -7.86 | -7.99 | -8.12 | -8.26 |
| WACC | |||||||||||
| PV UFCF | -14.98 | -6.67 | -6.42 | -6.18 | -5.94 | ||||||
| SUM PV UFCF | -110.03 |
Terminal Value
| Growth in perpetuity method: | |
|---|---|
| Long-term growth rate | |
| WACC (%) | 5.63 |
| Free cash flow (t + 1) | -8.59 |
| Terminal Value | -526.82 |
| Present Value of Terminal Value | -400.61 |
Intrinsic Value
| Enterprise Value | -510.64 |
|---|---|
| Net Debt | -616.22 |
| Equity Value | 105.58 |
| Shares Outstanding | 889.58 |
| Equity Value Per Share | 0.12 |
Results Unlevered DCF
| Wacc / Long-term Growth | -4 (%) | -3 (%) | -2 (%) | -1 (%) | 0 (%) | 1 (%) | 2 (%) | 3 (%) | 4 (%) |
|---|---|---|---|---|---|---|---|---|---|
| 7.63 (%) | 0.47 Sell | 0.46 Sell | 0.43 Sell | 0.40 Sell | 0.36 Sell | 0.27 Sell | 0.08 Sell | -0.70 Sell | 2.75 Sell |
| 7.13 (%) | 0.48 Sell | 0.47 Sell | 0.45 Sell | 0.42 Sell | 0.39 Sell | 0.32 Sell | 0.21 Sell | -0.12 Sell | -5.50 Sell |
| 6.63 (%) | 0.49 Sell | 0.47 Sell | 0.46 Sell | 0.44 Sell | 0.41 Sell | 0.36 Sell | 0.28 Sell | 0.10 Sell | -0.65 Sell |
| 6.13 (%) | 0.49 Sell | 0.48 Sell | 0.47 Sell | 0.45 Sell | 0.43 Sell | 0.39 Sell | 0.33 Sell | 0.22 Sell | -0.10 Sell |
| 5.63 (%) | 0.50 Sell | 0.49 Sell | 0.48 Sell | 0.46 Sell | 0.44 Sell | 0.42 Sell | 0.37 Sell | 0.29 Sell | 0.12 Sell |
| 5.13 (%) | 0.50 Sell | 0.50 Sell | 0.49 Sell | 0.47 Sell | 0.46 Sell | 0.43 Sell | 0.40 Sell | 0.34 Sell | 0.23 Sell |
| 4.63 (%) | 0.51 Sell | 0.50 Sell | 0.49 Sell | 0.48 Sell | 0.47 Sell | 0.45 Sell | 0.42 Sell | 0.38 Sell | 0.30 Sell |
| 4.13 (%) | 0.51 Sell | 0.51 Sell | 0.50 Sell | 0.49 Sell | 0.48 Sell | 0.46 Sell | 0.44 Sell | 0.40 Sell | 0.35 Sell |
| 3.63 (%) | 0.52 Sell | 0.51 Sell | 0.50 Sell | 0.50 Sell | 0.48 Sell | 0.47 Sell | 0.45 Sell | 0.43 Sell | 0.38 Sell |