Discounted Cash Flow (DCF) Analysis Levered

Chegg, Inc. (CHGG)

$28.41

-0.15 (-0.53%)

All numbers are in Millions, Currency in USD

Stock DCF: 69.98 | 28.41 | undervalue

Free Cash Flow

Year A/P	2017 Actual	2018 Actual	2019 Actual	2020 Actual	2021 Actual	2022 Projected	2023 Projected	2024 Projected	2025 Projected	2026 Projected
Revenue	255.07	321.08	410.93	644.34	776.27	1,030.76	1,368.70	1,817.43	2,413.27	3,204.46
Revenue (%)
Operating Cash Flow	51.15	75.11	113.40	236.44	273.22	294.67	391.27	519.55	689.89	916.06
Operating Cash Flow (%)
Capital Expenditure	-26.14	-31.22	-42.33	-139.88	-105.11	-135.08	-179.36	-238.17	-316.25	-419.94
Capital Expenditure (%)
Free Cash Flow	25.01	43.89	71.08	96.56	168.11	159.59	211.91	281.38	373.63	496.13

Weighted Average Cost Of Capital

Share price	$ 28.41
Beta	0.972
Diluted Shares Outstanding	146.70
Cost of Debt
Tax Rate	125.41
After-tax Cost of Debt	-0.10%
Risk-Free Rate
Market Risk Premium
Cost of Equity	8.293
Total Debt	1,697.27
Total Equity	4,167.72
Total Capital	5,864.98
Debt Weighting	28.94
Equity Weighting	71.06
Wacc

Build Up Free Cash Flow

Year A/P	2017 Actual	2018 Actual	2019 Actual	2020 Actual	2021 Actual	2022 Projected	2023 Projected	2024 Projected	2025 Projected	2026 Projected
Revenue	255.07	321.08	410.93	644.34	776.27	1,030.76	1,368.70	1,817.43	2,413.27	3,204.46
Operating Cash Flow	51.15	75.11	113.40	236.44	273.22	294.67	391.27	519.55	689.89	916.06
Capital Expenditure	-26.14	-31.22	-42.33	-139.88	-105.11	-135.08	-179.36	-238.17	-316.25	-419.94
Free Cash Flow	25.01	43.89	71.08	96.56	168.11	159.59	211.91	281.38	373.63	496.13
WACC
PV LFCF						150.75	189.10	237.19	297.52	373.19
SUM PV LFCF										1,247.75

Terminal Value

Growth in perpetuity method:
Long-term growth rate
WACC (%)	5.86
Free cash flow (t + 1)	506.05
Terminal Value	13,110.11
Present Value of Terminal Value	9,861.59

Intrinsic Value

Enterprise Value	11,109.34
Net Debt	843.19
Equity Value	10,266.15
Shares Outstanding	146.70
Equity Value Per Share	69.98