Discounted Cash Flow (DCF) Analysis Levered

Houghton Mifflin Harcourt Company (HMHC)

$21.03

0.00 (0.00%)

All numbers are in Millions, Currency in USD

Stock DCF: 8.67 | 21.03 | overvalue

Free Cash Flow

Year A/P	2017 Actual	2018 Actual	2019 Actual	2020 Actual	2021 Actual	2022 Projected	2023 Projected	2024 Projected	2025 Projected	2026 Projected
Revenue	1,407.51	1,322.42	1,390.67	1,031.29	1,050.80	985.56	924.37	866.98	813.15	762.67
Revenue (%)
Operating Cash Flow	135.13	114.91	254.98	115.25	267.67	144.43	135.46	127.05	119.16	111.77
Operating Cash Flow (%)
Capital Expenditure	-60.29	-53.74	-37.56	-50.94	-39.09	-38.85	-36.44	-34.17	-32.05	-30.06
Capital Expenditure (%)
Free Cash Flow	74.84	61.17	217.41	64.31	228.58	105.58	99.03	92.88	87.11	81.70

Weighted Average Cost Of Capital

Share price	$ 21.03
Beta	1.136
Diluted Shares Outstanding	131.65
Cost of Debt
Tax Rate	56.60
After-tax Cost of Debt	3.36%
Risk-Free Rate
Market Risk Premium
Cost of Equity	9.987
Total Debt	452.54
Total Equity	2,768.65
Total Capital	3,221.19
Debt Weighting	14.05
Equity Weighting	85.95
Wacc

Build Up Free Cash Flow

Year A/P	2017 Actual	2018 Actual	2019 Actual	2020 Actual	2021 Actual	2022 Projected	2023 Projected	2024 Projected	2025 Projected	2026 Projected
Revenue	1,407.51	1,322.42	1,390.67	1,031.29	1,050.80	985.56	924.37	866.98	813.15	762.67
Operating Cash Flow	135.13	114.91	254.98	115.25	267.67	144.43	135.46	127.05	119.16	111.77
Capital Expenditure	-60.29	-53.74	-37.56	-50.94	-39.09	-38.85	-36.44	-34.17	-32.05	-30.06
Free Cash Flow	74.84	61.17	217.41	64.31	228.58	105.58	99.03	92.88	87.11	81.70
WACC
PV LFCF						96.81	83.26	71.60	61.58	52.96
SUM PV LFCF										366.20

Terminal Value

Growth in perpetuity method:
Long-term growth rate
WACC (%)	9.06
Free cash flow (t + 1)	83.34
Terminal Value	1,180.43
Present Value of Terminal Value	765.09

Intrinsic Value

Enterprise Value	1,131.29
Net Debt	-10.59
Equity Value	1,141.88
Shares Outstanding	131.65
Equity Value Per Share	8.67