Discounted Cash Flow (DCF) Analysis Levered

Hello Group Inc. (MOMO)

$5

+0.01 (+0.20%)

All numbers are in Millions, Currency in USD

Stock DCF: 133.06 | 5 | 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	1,377.05	2,145.35	2,722.41	2,403.87	2,332.12	2,728.61	3,192.51	3,735.27	4,370.32	5,113.33
Revenue (%)
Operating Cash Flow	446.67	532.43	871.82	492.94	249.47	657.50	769.28	900.07	1,053.09	1,232.13
Operating Cash Flow (%)
Capital Expenditure	-36.88	-38.85	-29.84	-19.91	-15.25	-38.57	-45.13	-52.80	-61.78	-72.28
Capital Expenditure (%)
Free Cash Flow	409.79	493.58	841.98	473.03	234.22	618.93	724.15	847.27	991.31	1,159.85

Weighted Average Cost Of Capital

Share price	$ 5
Beta	1.274
Diluted Shares Outstanding	202.35
Cost of Debt
Tax Rate	-39.07
After-tax Cost of Debt	1.53%
Risk-Free Rate
Market Risk Premium
Cost of Equity	9.139
Total Debt	773.02
Total Equity	1,011.75
Total Capital	1,784.77
Debt Weighting	43.31
Equity Weighting	56.69
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	1,377.05	2,145.35	2,722.41	2,403.87	2,332.12	2,728.61	3,192.51	3,735.27	4,370.32	5,113.33
Operating Cash Flow	446.67	532.43	871.82	492.94	249.47	657.50	769.28	900.07	1,053.09	1,232.13
Capital Expenditure	-36.88	-38.85	-29.84	-19.91	-15.25	-38.57	-45.13	-52.80	-61.78	-72.28
Free Cash Flow	409.79	493.58	841.98	473.03	234.22	618.93	724.15	847.27	991.31	1,159.85
WACC
PV LFCF						584.78	646.44	714.61	789.97	873.28
SUM PV LFCF										3,609.08

Terminal Value

Growth in perpetuity method:
Long-term growth rate
WACC (%)	5.84
Free cash flow (t + 1)	1,183.05
Terminal Value	30,808.54
Present Value of Terminal Value	23,196.48

Intrinsic Value

Enterprise Value	26,805.56
Net Debt	-118.27
Equity Value	26,923.83
Shares Outstanding	202.35
Equity Value Per Share	133.06