Discounted Cash Flow (DCF) Analysis Levered

Heritage Insurance Holdings, Inc. (HRTG)

$7.14

+0.18 (+2.59%)
All numbers are in Millions, Currency in USD
Stock DCF: 114.84 | 7.14 | 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 480.17511.30593.39631.56662.46718.54779.37845.35916.92994.54
Revenue (%)
Operating Cash Flow 95.43119.66170.2160.13-34.26109.66118.95129.02139.94151.79
Operating Cash Flow (%)
Capital Expenditure -2.28-4.98-0.75-1.01-12.38-5.18-5.62-6.10-6.61-7.17
Capital Expenditure (%)
Free Cash Flow 93.15114.67169.4659.12-46.64104.48113.33122.92133.33144.62

Weighted Average Cost Of Capital

Share price $ 7.14
Beta 0.810
Diluted Shares Outstanding 26.34
Cost of Debt
Tax Rate 7.11
After-tax Cost of Debt 4.81%
Risk-Free Rate
Market Risk Premium
Cost of Equity 7.982
Total Debt 170.19
Total Equity 188.09
Total Capital 358.28
Debt Weighting 47.50
Equity Weighting 52.50
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 480.17511.30593.39631.56662.46718.54779.37845.35916.92994.54
Operating Cash Flow 95.43119.66170.2160.13-34.26109.66118.95129.02139.94151.79
Capital Expenditure -2.28-4.98-0.75-1.01-12.38-5.18-5.62-6.10-6.61-7.17
Free Cash Flow 93.15114.67169.4659.12-46.64104.48113.33122.92133.33144.62
WACC
PV LFCF 118.46120.67122.92125.21127.55
SUM PV LFCF 509.26

Terminal Value

Growth in perpetuity method:
Long-term growth rate
WACC (%) 6.48
Free cash flow (t + 1) 147.51
Terminal Value 3,292.58
Present Value of Terminal Value 2,405.45

Intrinsic Value

Enterprise Value 2,914.71
Net Debt -110.69
Equity Value 3,025.40
Shares Outstanding 26.34
Equity Value Per Share 114.84