Discounted Cash Flow (DCF) Analysis Levered

Frontdoor, Inc. (FTDR)

$31.28

-0.14 (-0.45%)

All numbers are in Millions, Currency in USD

Stock DCF: 55.43 | 31.28 | 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	1,259	1,365	1,475	1,602	1,662	1,781.80	1,910.24	2,047.94	2,195.56	2,353.83
Revenue (%)
Operating Cash Flow	189	200	207	185	142	227.32	243.71	261.28	280.11	300.30
Operating Cash Flow (%)
Capital Expenditure	-27	-22	-32	-31	-40	-36.59	-39.23	-42.05	-45.09	-48.34
Capital Expenditure (%)
Free Cash Flow	162	178	175	154	102	190.73	204.48	219.22	235.02	251.96

Weighted Average Cost Of Capital

Share price	$ 31.28
Beta	0.760
Diluted Shares Outstanding	82
Cost of Debt
Tax Rate	23.66
After-tax Cost of Debt	3.73%
Risk-Free Rate
Market Risk Premium
Cost of Equity	7.399
Total Debt	635
Total Equity	2,564.96
Total Capital	3,199.96
Debt Weighting	19.84
Equity Weighting	80.16
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	1,259	1,365	1,475	1,602	1,662	1,781.80	1,910.24	2,047.94	2,195.56	2,353.83
Operating Cash Flow	189	200	207	185	142	227.32	243.71	261.28	280.11	300.30
Capital Expenditure	-27	-22	-32	-31	-40	-36.59	-39.23	-42.05	-45.09	-48.34
Free Cash Flow	162	178	175	154	102	190.73	204.48	219.22	235.02	251.96
WACC
PV LFCF						178.81	179.71	180.62	181.53	182.44
SUM PV LFCF										903.10

Terminal Value

Growth in perpetuity method:
Long-term growth rate
WACC (%)	6.67
Free cash flow (t + 1)	257
Terminal Value	5,503.28
Present Value of Terminal Value	3,984.84

Intrinsic Value

Enterprise Value	4,887.93
Net Debt	343
Equity Value	4,544.93
Shares Outstanding	82
Equity Value Per Share	55.43