Discounted Cash Flow (DCF) Analysis Levered
Electronic Arts Inc. (EA)
$136.68
+2.91 (+2.18%)
All numbers are in Millions, Currency in USD
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 | 5,150 | 4,950 | 5,537 | 5,629 | 6,991 | 7,582.31 | 8,223.64 | 8,919.21 | 9,673.61 | 10,491.83 |
|---|---|---|---|---|---|---|---|---|---|---|
| Revenue (%) | ||||||||||
| Operating Cash Flow | 1,692 | 1,547 | 1,797 | 1,934 | 1,899 | 2,397.26 | 2,600.03 | 2,819.94 | 3,058.46 | 3,317.15 |
| Operating Cash Flow (%) | ||||||||||
| Capital Expenditure | -107 | -119 | -140 | -124 | -188 | -180.49 | -195.76 | -212.32 | -230.27 | -249.75 |
| Capital Expenditure (%) | ||||||||||
| Free Cash Flow | 1,585 | 1,428 | 1,657 | 1,810 | 1,711 | 2,216.77 | 2,404.27 | 2,607.63 | 2,828.18 | 3,067.40 |
Weighted Average Cost Of Capital
| Share price | $ 136.68 |
|---|---|
| Beta | 0.827 |
| Diluted Shares Outstanding | 292 |
| Cost of Debt | |
| Tax Rate | 27.01 |
| After-tax Cost of Debt | 3.65% |
| Risk-Free Rate | |
| Market Risk Premium | |
| Cost of Equity | 6.666 |
| Total Debt | - |
| Total Equity | 39,910.56 |
| Total Capital | 39,910.56 |
| Debt Weighting | 0.00 |
| Equity Weighting | 100.00 |
| 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 | 5,150 | 4,950 | 5,537 | 5,629 | 6,991 | 7,582.31 | 8,223.64 | 8,919.21 | 9,673.61 | 10,491.83 |
|---|---|---|---|---|---|---|---|---|---|---|
| Operating Cash Flow | 1,692 | 1,547 | 1,797 | 1,934 | 1,899 | 2,397.26 | 2,600.03 | 2,819.94 | 3,058.46 | 3,317.15 |
| Capital Expenditure | -107 | -119 | -140 | -124 | -188 | -180.49 | -195.76 | -212.32 | -230.27 | -249.75 |
| Free Cash Flow | 1,585 | 1,428 | 1,657 | 1,810 | 1,711 | 2,216.77 | 2,404.27 | 2,607.63 | 2,828.18 | 3,067.40 |
| WACC | ||||||||||
| PV LFCF | 2,078.16 | 2,113 | 2,148.42 | 2,184.43 | 2,221.05 | |||||
| SUM PV LFCF | 10,745.05 |
Terminal Value
| Growth in perpetuity method: | |
|---|---|
| Long-term growth rate | |
| WACC (%) | 6.67 |
| Free cash flow (t + 1) | 3,128.75 |
| Terminal Value | 66,996.71 |
| Present Value of Terminal Value | 48,511.20 |
Intrinsic Value
| Enterprise Value | 59,256.25 |
|---|---|
| Net Debt | -2,732 |
| Equity Value | 61,988.25 |
| Shares Outstanding | 292 |
| Equity Value Per Share | 212.29 |