Discounted Cash Flow (DCF) Analysis Levered

Heritage Insurance Holdings, Inc. (HRTG)

$2.26

-0.17 (-7.00%)
All numbers are in Millions, Currency in USD
Stock DCF: 110.32 | 2.26 | 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 406.62480.17511.30593.39631.56705.86788.90881.71985.441,101.37
Revenue (%)
Operating Cash Flow 7.5795.43119.66170.21-0.27104.15116.41130.10145.41162.52
Operating Cash Flow (%)
Capital Expenditure -0.38-2.28-4.98-0.75-2.64-2.95-3.30-3.68-4.12-4.60
Capital Expenditure (%)
Free Cash Flow 7.1893.15114.67169.46-2.91101.20113.11126.42141.29157.91

Weighted Average Cost Of Capital

Share price $ 2.26
Beta 0.856
Diluted Shares Outstanding 27.99
Cost of Debt
Tax Rate 1.72
After-tax Cost of Debt 6.49%
Risk-Free Rate
Market Risk Premium
Cost of Equity 7.792
Total Debt 120.76
Total Equity 63.26
Total Capital 184.01
Debt Weighting 65.62
Equity Weighting 34.38
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 406.62480.17511.30593.39631.56705.86788.90881.71985.441,101.37
Operating Cash Flow 7.5795.43119.66170.21-0.27104.15116.41130.10145.41162.52
Capital Expenditure -0.38-2.28-4.98-0.75-2.64-2.95-3.30-3.68-4.12-4.60
Free Cash Flow 7.1893.15114.67169.46-2.91101.20113.11126.42141.29157.91
WACC
PV LFCF 72.3675.6279.0482.6086.33
SUM PV LFCF 517.85

Terminal Value

Growth in perpetuity method:
Long-term growth rate
WACC (%) 6.94
Free cash flow (t + 1) 161.07
Terminal Value 3,260.55
Present Value of Terminal Value 2,331.25

Intrinsic Value

Enterprise Value 2,849.10
Net Debt -238.58
Equity Value 3,087.68
Shares Outstanding 27.99
Equity Value Per Share 110.32