Discounted Cash Flow (DCF) Analysis Levered

Inovalon Holdings, Inc. (INOV)

$41.06

0.00 (0.00%)

All numbers are in Millions, Currency in USD

Stock DCF: 6.45 | 41.06 | overvalue

Free Cash Flow

Year A/P	2016 Actual	2017 Actual	2018 Actual	2019 Actual	2020 Actual	2021 Projected	2022 Projected	2023 Projected	2024 Projected	2025 Projected
Revenue	427.59	449.36	527.68	642.41	667.52	747.92	837.99	938.91	1,051.98	1,178.68
Revenue (%)
Operating Cash Flow	92.83	97.71	90.40	106.48	146.36	148.22	166.07	186.07	208.47	233.58
Operating Cash Flow (%)
Capital Expenditure	-39.03	-65.54	-64.97	-58.94	-86.61	-87.02	-97.50	-109.24	-122.40	-137.14
Capital Expenditure (%)
Free Cash Flow	53.80	32.16	25.43	47.54	59.75	61.19	68.56	76.82	86.07	96.44

Weighted Average Cost Of Capital

Share price	$ 41.06
Beta	0.529
Diluted Shares Outstanding	149.72
Cost of Debt
Tax Rate	-46.04
After-tax Cost of Debt	6.26%
Risk-Free Rate
Market Risk Premium
Cost of Equity	7.038
Total Debt	897.30
Total Equity	6,147.50
Total Capital	7,044.81
Debt Weighting	12.74
Equity Weighting	87.26
Wacc

Build Up Free Cash Flow

Year A/P	2016 Actual	2017 Actual	2018 Actual	2019 Actual	2020 Actual	2021 Projected	2022 Projected	2023 Projected	2024 Projected	2025 Projected
Revenue	427.59	449.36	527.68	642.41	667.52	747.92	837.99	938.91	1,051.98	1,178.68
Operating Cash Flow	92.83	97.71	90.40	106.48	146.36	148.22	166.07	186.07	208.47	233.58
Capital Expenditure	-39.03	-65.54	-64.97	-58.94	-86.61	-87.02	-97.50	-109.24	-122.40	-137.14
Free Cash Flow	53.80	32.16	25.43	47.54	59.75	61.19	68.56	76.82	86.07	96.44
WACC
PV LFCF						57.22	59.95	62.82	65.81	68.95
SUM PV LFCF										314.76

Terminal Value

Growth in perpetuity method:
Long-term growth rate
WACC (%)	6.94
Free cash flow (t + 1)	98.37
Terminal Value	1,991.27
Present Value of Terminal Value	1,423.74

Intrinsic Value

Enterprise Value	1,738.50
Net Debt	773.42
Equity Value	965.07
Shares Outstanding	149.72
Equity Value Per Share	6.45