Discounted Cash Flow (DCF) Analysis Levered

Mercury General Corporation (MCY)

$29.11

-0.47 (-1.59%)
All numbers are in Millions, Currency in USD
Stock DCF: 268.79 | 29.11 | 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 3,415.963,3803,972.523,784.513,993.364,165.704,345.484,533.024,728.664,932.74
Revenue (%)
Operating Cash Flow 341.41383.43519.68605.62501.58524.74547.39571.01595.65621.36
Operating Cash Flow (%)
Capital Expenditure -19.44-27.96-40.09-39.95-41.44-37.48-39.10-40.79-42.55-44.38
Capital Expenditure (%)
Free Cash Flow 321.96355.48479.59565.66460.14487.26508.29530.22553.11576.98

Weighted Average Cost Of Capital

Share price $ 29.11
Beta 0.487
Diluted Shares Outstanding 55.36
Cost of Debt
Tax Rate 17.16
After-tax Cost of Debt 3.48%
Risk-Free Rate
Market Risk Premium
Cost of Equity 6.062
Total Debt 407.51
Total Equity 1,611.47
Total Capital 2,018.98
Debt Weighting 20.18
Equity Weighting 79.82
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 3,415.963,3803,972.523,784.513,993.364,165.704,345.484,533.024,728.664,932.74
Operating Cash Flow 341.41383.43519.68605.62501.58524.74547.39571.01595.65621.36
Capital Expenditure -19.44-27.96-40.09-39.95-41.44-37.48-39.10-40.79-42.55-44.38
Free Cash Flow 321.96355.48479.59565.66460.14487.26508.29530.22553.11576.98
WACC
PV LFCF 461.68456.32451.03445.80440.63
SUM PV LFCF 2,255.46

Terminal Value

Growth in perpetuity method:
Long-term growth rate
WACC (%) 5.54
Free cash flow (t + 1) 588.52
Terminal Value 16,624.74
Present Value of Terminal Value 12,696.07

Intrinsic Value

Enterprise Value 14,951.54
Net Debt 71.95
Equity Value 14,879.59
Shares Outstanding 55.36
Equity Value Per Share 268.79