Discounted Cash Flow (DCF) Analysis Levered

Electronic Arts Inc. (EA)

$125.94

-1.17 (-0.92%)
All numbers are in Millions, Currency in USD
Stock DCF: 198.21 | 125.94 | 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 4,9505,5375,6296,9917,4268,241.729,147.0410,151.8111,266.9512,504.58
Revenue (%)
Operating Cash Flow 1,5471,7971,9341,8991,5502,408.242,672.782,966.383,292.223,653.86
Operating Cash Flow (%)
Capital Expenditure -119-140-124-188-207-207.89-230.73-256.07-284.20-315.42
Capital Expenditure (%)
Free Cash Flow 1,4281,6571,8101,7111,3432,200.352,442.052,710.313,008.023,338.44

Weighted Average Cost Of Capital

Share price $ 125.94
Beta 0.867
Diluted Shares Outstanding 278
Cost of Debt
Tax Rate 39.52
After-tax Cost of Debt 0.19%
Risk-Free Rate
Market Risk Premium
Cost of Equity 7.836
Total Debt 1,880
Total Equity 35,011.32
Total Capital 36,891.32
Debt Weighting 5.10
Equity Weighting 94.90
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 4,9505,5375,6296,9917,4268,241.729,147.0410,151.8111,266.9512,504.58
Operating Cash Flow 1,5471,7971,9341,8991,5502,408.242,672.782,966.383,292.223,653.86
Capital Expenditure -119-140-124-188-207-207.89-230.73-256.07-284.20-315.42
Free Cash Flow 1,4281,6571,8101,7111,3432,200.352,442.052,710.313,008.023,338.44
WACC
PV LFCF 1,773.671,832.021,892.281,954.532,018.83
SUM PV LFCF 10,935.13

Terminal Value

Growth in perpetuity method:
Long-term growth rate
WACC (%) 7.45
Free cash flow (t + 1) 3,405.21
Terminal Value 62,480.96
Present Value of Terminal Value 43,623.01

Intrinsic Value

Enterprise Value 54,558.14
Net Debt -544
Equity Value 55,102.14
Shares Outstanding 278
Equity Value Per Share 198.21