Discounted Cash Flow (DCF) Analysis Levered

Heritage Insurance Holdings, Inc. (HRTG)

$1.6482

-0.03 (-1.89%)

All numbers are in Millions, Currency in USD

Stock DCF: 170.20 | 1.6482 | undervalue

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	406.62	480.17	511.30	593.39	631.56	705.86	788.90	881.71	985.44	1,101.37
Revenue (%)
Operating Cash Flow	7.57	95.43	119.66	170.21	60.13	117.66	131.50	146.97	164.26	183.58
Operating Cash Flow (%)
Capital Expenditure	-0.38	-2.28	-4.98	-0.75	-1.01	-2.59	-2.89	-3.23	-3.61	-4.03
Capital Expenditure (%)
Free Cash Flow	7.18	93.15	114.67	169.46	59.12	115.07	128.61	143.74	160.65	179.55

Weighted Average Cost Of Capital

Share price	$ 1.6,482
Beta	0.685
Diluted Shares Outstanding	27.80
Cost of Debt
Tax Rate	1.72
After-tax Cost of Debt	5.16%
Risk-Free Rate
Market Risk Premium
Cost of Equity	6.941
Total Debt	151.93
Total Equity	45.83
Total Capital	197.76
Debt Weighting	76.83
Equity Weighting	23.17
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	406.62	480.17	511.30	593.39	631.56	705.86	788.90	881.71	985.44	1,101.37
Operating Cash Flow	7.57	95.43	119.66	170.21	60.13	117.66	131.50	146.97	164.26	183.58
Capital Expenditure	-0.38	-2.28	-4.98	-0.75	-1.01	-2.59	-2.89	-3.23	-3.61	-4.03
Free Cash Flow	7.18	93.15	114.67	169.46	59.12	115.07	128.61	143.74	160.65	179.55
WACC
PV LFCF						97.80	103.54	109.62	116.05	122.86
SUM PV LFCF										612.82

Terminal Value

Growth in perpetuity method:
Long-term growth rate
WACC (%)	5.57
Free cash flow (t + 1)	183.14
Terminal Value	5,129.96
Present Value of Terminal Value	3,912.11

Intrinsic Value

Enterprise Value	4,524.94
Net Debt	-207.41
Equity Value	4,732.34
Shares Outstanding	27.80
Equity Value Per Share	170.20