Discounted Cash Flow (DCF) Analysis Levered

Automatic Data Processing, Inc. (ADP)

$225.08

-1.69 (-0.75%)
All numbers are in Millions, Currency in USD
Stock DCF: 126.30 | 225.08 | overvalue

Free Cash Flow

Year
A/P
2018
Actual
2019
Actual
2020
Actual
2021
Actual
2022
Actual
2023
Projected
2024
Projected
2025
Projected
2026
Projected
2027
Projected
Revenue 13,325.8014,175.2014,589.8015,005.4016,046.5016,812.1517,614.3218,454.7819,335.3320,257.90
Revenue (%)
Operating Cash Flow 2,515.202,688.303,026.203,093.303,099.503,312.393,470.433,636.023,809.513,991.28
Operating Cash Flow (%)
Capital Expenditure -470.80-566.50-616.40-505.90-553.40-624.55-654.35-685.57-718.29-752.56
Capital Expenditure (%)
Free Cash Flow 2,044.402,121.802,409.802,587.402,546.102,687.832,816.082,950.453,091.223,238.72

Weighted Average Cost Of Capital

Share price $ 225.08
Beta 0.828
Diluted Shares Outstanding 421.10
Cost of Debt
Tax Rate 22.48
After-tax Cost of Debt 1.81%
Risk-Free Rate
Market Risk Premium
Cost of Equity 7.550
Total Debt 3,494.40
Total Equity 94,781.19
Total Capital 98,275.59
Debt Weighting 3.56
Equity Weighting 96.44
Wacc

Build Up Free Cash Flow

Year
A/P
2018
Actual
2019
Actual
2020
Actual
2021
Actual
2022
Actual
2023
Projected
2024
Projected
2025
Projected
2026
Projected
2027
Projected
Revenue 13,325.8014,175.2014,589.8015,005.4016,046.5016,812.1517,614.3218,454.7819,335.3320,257.90
Operating Cash Flow 2,515.202,688.303,026.203,093.303,099.503,312.393,470.433,636.023,809.513,991.28
Capital Expenditure -470.80-566.50-616.40-505.90-553.40-624.55-654.35-685.57-718.29-752.56
Free Cash Flow 2,044.402,121.802,409.802,587.402,546.102,687.832,816.082,950.453,091.223,238.72
WACC
PV LFCF 2,503.802,443.662,384.962,327.682,271.76
SUM PV LFCF 11,931.87

Terminal Value

Growth in perpetuity method:
Long-term growth rate
WACC (%) 7.35
Free cash flow (t + 1) 3,303.49
Terminal Value 61,747.56
Present Value of Terminal Value 43,312.13

Intrinsic Value

Enterprise Value 55,244
Net Debt 2,058.10
Equity Value 53,185.90
Shares Outstanding 421.10
Equity Value Per Share 126.30