Discounted Cash Flow (DCF) Analysis Levered

Chegg, Inc. (CHGG)

$8.805

-0.23 (-2.60%)
All numbers are in Millions, Currency in USD
Stock DCF: 57.35 | 8.805 | undervalue

Free Cash Flow

Year
A/P
2019
Actual
2020
Actual
2021
Actual
2022
Actual
2023
Actual
2024
Projected
2025
Projected
2026
Projected
2027
Projected
2028
Projected
Revenue 410.93644.34776.27766.90716.30840.70986.711,158.081,359.211,595.28
Revenue (%)
Operating Cash Flow 113.40236.44273.22255.74246.20281.14329.97387.28454.54533.49
Operating Cash Flow (%)
Capital Expenditure -42.33-81.32-94.18-103.09-83.05-101.04-118.58-139.18-163.35-191.72
Capital Expenditure (%)
Free Cash Flow 71.08155.12179.04152.64163.15180.11211.39248.10291.19341.76

Weighted Average Cost Of Capital

Share price $ 8.805
Beta 1.277
Diluted Shares Outstanding 128.57
Cost of Debt
Tax Rate 63.87
After-tax Cost of Debt 1.52%
Risk-Free Rate
Market Risk Premium
Cost of Equity 10.237
Total Debt 617.90
Total Equity 1,132.05
Total Capital 1,749.95
Debt Weighting 35.31
Equity Weighting 64.69
Wacc

Build Up Free Cash Flow

Year
A/P
2019
Actual
2020
Actual
2021
Actual
2022
Actual
2023
Actual
2024
Projected
2025
Projected
2026
Projected
2027
Projected
2028
Projected
Revenue 410.93644.34776.27766.90716.30840.70986.711,158.081,359.211,595.28
Operating Cash Flow 113.40236.44273.22255.74246.20281.14329.97387.28454.54533.49
Capital Expenditure -42.33-81.32-94.18-103.09-83.05-101.04-118.58-139.18-163.35-191.72
Free Cash Flow 71.08155.12179.04152.64163.15180.11211.39248.10291.19341.76
WACC
PV LFCF 168.07184.08201.62220.82241.86
SUM PV LFCF 1,016.46

Terminal Value

Growth in perpetuity method:
Long-term growth rate
WACC (%) 7.16
Free cash flow (t + 1) 353.73
Terminal Value 9,664.63
Present Value of Terminal Value 6,839.46

Intrinsic Value

Enterprise Value 7,855.91
Net Debt 482.14
Equity Value 7,373.77
Shares Outstanding 128.57
Equity Value Per Share 57.35