Discounted Cash Flow (DCF) Analysis Levered

Heritage Insurance Holdings, Inc. (HRTG)

$6.1594

-0.32 (-4.95%)

All numbers are in Millions, Currency in USD

Stock DCF: 115.35 | 6.1594 | 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	480.17	511.30	593.39	631.56	662.46	718.54	779.37	845.35	916.92	994.54
Revenue (%)
Operating Cash Flow	95.43	119.66	170.21	60.13	-34.26	109.66	118.95	129.02	139.94	151.79
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	93.15	114.67	169.46	59.12	-46.64	104.48	113.33	122.92	133.33	144.62

Weighted Average Cost Of Capital

Share price	$ 6.1,594
Beta	0.729
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	8.194
Total Debt	170.19
Total Equity	162.26
Total Capital	332.45
Debt Weighting	51.19
Equity Weighting	48.81
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	480.17	511.30	593.39	631.56	662.46	718.54	779.37	845.35	916.92	994.54
Operating Cash Flow	95.43	119.66	170.21	60.13	-34.26	109.66	118.95	129.02	139.94	151.79
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	93.15	114.67	169.46	59.12	-46.64	104.48	113.33	122.92	133.33	144.62
WACC
PV LFCF						98.14	99.99	101.88	103.79	105.75
SUM PV LFCF										509.55

Terminal Value

Growth in perpetuity method:
Long-term growth rate
WACC (%)	6.46
Free cash flow (t + 1)	147.51
Terminal Value	3,307.34
Present Value of Terminal Value	2,418.50

Intrinsic Value

Enterprise Value	2,928.06
Net Debt	-110.69
Equity Value	3,038.75
Shares Outstanding	26.34
Equity Value Per Share	115.35