Discounted Cash Flow (DCF) Analysis Levered

Kelly Services, Inc. (KELYA)

$18.32

-0.14 (-0.76%)

All numbers are in Millions, Currency in USD

Stock DCF: 20.13 | 18.32 | 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	5,513.90	5,355.60	4,516	4,909.70	4,965.40	4,857.46	4,751.86	4,648.56	4,547.51	4,448.65
Revenue (%)
Operating Cash Flow	61.40	102.20	186	85	-76.30	71.26	69.71	68.20	66.71	65.26
Operating Cash Flow (%)
Capital Expenditure	-25.60	-20	-15.50	-11.20	-12	-16.04	-15.69	-15.35	-15.01	-14.69
Capital Expenditure (%)
Free Cash Flow	35.80	82.20	170.50	73.80	-88.30	55.22	54.02	52.85	51.70	50.58

Weighted Average Cost Of Capital

Share price	$ 18.32
Beta	1.108
Diluted Shares Outstanding	38.10
Cost of Debt
Tax Rate	11.10
After-tax Cost of Debt	2.65%
Risk-Free Rate
Market Risk Premium
Cost of Equity	9.667
Total Debt	70.40
Total Equity	697.99
Total Capital	768.39
Debt Weighting	9.16
Equity Weighting	90.84
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	5,513.90	5,355.60	4,516	4,909.70	4,965.40	4,857.46	4,751.86	4,648.56	4,547.51	4,448.65
Operating Cash Flow	61.40	102.20	186	85	-76.30	71.26	69.71	68.20	66.71	65.26
Capital Expenditure	-25.60	-20	-15.50	-11.20	-12	-16.04	-15.69	-15.35	-15.01	-14.69
Free Cash Flow	35.80	82.20	170.50	73.80	-88.30	55.22	54.02	52.85	51.70	50.58
WACC
PV LFCF						32.89	29.51	26.48	23.76	21.32
SUM PV LFCF										206.33

Terminal Value

Growth in perpetuity method:
Long-term growth rate
WACC (%)	9.02
Free cash flow (t + 1)	51.59
Terminal Value	734.86
Present Value of Terminal Value	477.17

Intrinsic Value

Enterprise Value	683.51
Net Debt	-83.30
Equity Value	766.81
Shares Outstanding	38.10
Equity Value Per Share	20.13