Discounted Cash Flow (DCF) Analysis Levered

Electronic Arts Inc. (EA)

$136.68

+2.91 (+2.18%)
All numbers are in Millions, Currency in USD
Stock DCF: 212.29 | 136.68 | undervalue

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 5,1504,9505,5375,6296,9917,582.318,223.648,919.219,673.6110,491.83
Revenue (%)
Operating Cash Flow 1,6921,5471,7971,9341,8992,397.262,600.032,819.943,058.463,317.15
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 1,5851,4281,6571,8101,7112,216.772,404.272,607.632,828.183,067.40

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 5,1504,9505,5375,6296,9917,582.318,223.648,919.219,673.6110,491.83
Operating Cash Flow 1,6921,5471,7971,9341,8992,397.262,600.032,819.943,058.463,317.15
Capital Expenditure -107-119-140-124-188-180.49-195.76-212.32-230.27-249.75
Free Cash Flow 1,5851,4281,6571,8101,7112,216.772,404.272,607.632,828.183,067.40
WACC
PV LFCF 2,078.162,1132,148.422,184.432,221.05
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