Discounted Cash Flow (DCF) Analysis Levered

McGrath RentCorp (MGRC)

$89.93

-0.55 (-0.61%)

All numbers are in Millions, Currency in USD

Stock DCF: 35.95 | 89.93 | overvalue

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	498.33	570.23	572.55	616.83	733.82	810.02	894.13	986.98	1,089.47	1,202.60
Revenue (%)
Operating Cash Flow	142.67	187.99	180.50	195.74	194.43	245.20	270.66	298.76	329.79	364.03
Operating Cash Flow (%)
Capital Expenditure	-138.74	-179.78	-100.05	-116.83	-205.31	-200.50	-221.32	-244.30	-269.67	-297.67
Capital Expenditure (%)
Free Cash Flow	3.93	8.21	80.45	78.92	-10.87	44.70	49.34	54.47	60.12	66.37

Weighted Average Cost Of Capital

Share price	$ 89.93
Beta	0.767
Diluted Shares Outstanding	24.52
Cost of Debt
Tax Rate	23.25
After-tax Cost of Debt	2.82%
Risk-Free Rate
Market Risk Premium
Cost of Equity	7.312
Total Debt	413.74
Total Equity	2,204.99
Total Capital	2,618.74
Debt Weighting	15.80
Equity Weighting	84.20
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	498.33	570.23	572.55	616.83	733.82	810.02	894.13	986.98	1,089.47	1,202.60
Operating Cash Flow	142.67	187.99	180.50	195.74	194.43	245.20	270.66	298.76	329.79	364.03
Capital Expenditure	-138.74	-179.78	-100.05	-116.83	-205.31	-200.50	-221.32	-244.30	-269.67	-297.67
Free Cash Flow	3.93	8.21	80.45	78.92	-10.87	44.70	49.34	54.47	60.12	66.37
WACC
PV LFCF						41.93	43.42	44.96	46.56	48.21
SUM PV LFCF										225.09

Terminal Value

Growth in perpetuity method:
Long-term growth rate
WACC (%)	6.60
Free cash flow (t + 1)	67.69
Terminal Value	1,471.58
Present Value of Terminal Value	1,069.05

Intrinsic Value

Enterprise Value	1,294.14
Net Debt	412.79
Equity Value	881.35
Shares Outstanding	24.52
Equity Value Per Share	35.95