Discounted Cash Flow (DCF) Analysis Levered

H&R Block, Inc. (HRB)

$43.02

+0.63 (+1.49%)

All numbers are in Millions, Currency in USD

Stock DCF: 79.00 | 43.02 | 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	3,094.88	2,639.72	3,413.99	3,463.27	3,472.18	3,613.90	3,761.39	3,914.91	4,074.69	4,241
Revenue (%)
Operating Cash Flow	606.54	108.96	625.93	808.54	821.84	643.82	670.10	697.44	725.91	755.54
Operating Cash Flow (%)
Capital Expenditure	-95.49	-81.69	-52.79	-61.95	-69.70	-83.28	-86.68	-90.22	-93.90	-97.73
Capital Expenditure (%)
Free Cash Flow	511.05	27.28	573.14	746.58	752.14	560.54	583.41	607.23	632.01	657.80

Weighted Average Cost Of Capital

Share price	$ 43.02
Beta	0.642
Diluted Shares Outstanding	153.51
Cost of Debt
Tax Rate	22.15
After-tax Cost of Debt	2.94%
Risk-Free Rate
Market Risk Premium
Cost of Equity	7.685
Total Debt	1,934.91
Total Equity	6,604.09
Total Capital	8,538.99
Debt Weighting	22.66
Equity Weighting	77.34
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	3,094.88	2,639.72	3,413.99	3,463.27	3,472.18	3,613.90	3,761.39	3,914.91	4,074.69	4,241
Operating Cash Flow	606.54	108.96	625.93	808.54	821.84	643.82	670.10	697.44	725.91	755.54
Capital Expenditure	-95.49	-81.69	-52.79	-61.95	-69.70	-83.28	-86.68	-90.22	-93.90	-97.73
Free Cash Flow	511.05	27.28	573.14	746.58	752.14	560.54	583.41	607.23	632.01	657.80
WACC
PV LFCF						525.78	513.31	501.14	489.25	477.65
SUM PV LFCF										2,507.13

Terminal Value

Growth in perpetuity method:
Long-term growth rate
WACC (%)	6.61
Free cash flow (t + 1)	670.96
Terminal Value	14,554.44
Present Value of Terminal Value	10,568.31

Intrinsic Value

Enterprise Value	13,075.44
Net Debt	947.93
Equity Value	12,127.51
Shares Outstanding	153.51
Equity Value Per Share	79.00