Discounted Cash Flow (DCF) Analysis Levered

Polaris Inc. (PII)

$89.87

+1.55 (+1.75%)
All numbers are in Millions, Currency in USD
Stock DCF: 98.18 | 89.87 | 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 6,078.546,782.527,027.908,198.208,5899,375.2910,233.5611,170.3912,19313,309.22
Revenue (%)
Operating Cash Flow 477.11655.041,018.60293.70508.60778.23849.48927.241,012.131,104.79
Operating Cash Flow (%)
Capital Expenditure -225.41-251.37-213.90-298.30-306.60-331.26-361.58-394.68-430.81-470.25
Capital Expenditure (%)
Free Cash Flow 251.70403.66804.70-4.60202446.98487.90532.56581.32634.53

Weighted Average Cost Of Capital

Share price $ 89.87
Beta 1.609
Diluted Shares Outstanding 60.10
Cost of Debt
Tax Rate 20.75
After-tax Cost of Debt 3.26%
Risk-Free Rate
Market Risk Premium
Cost of Equity 11.704
Total Debt 2,168.90
Total Equity 5,401.19
Total Capital 7,570.09
Debt Weighting 28.65
Equity Weighting 71.35
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 6,078.546,782.527,027.908,198.208,5899,375.2910,233.5611,170.3912,19313,309.22
Operating Cash Flow 477.11655.041,018.60293.70508.60778.23849.48927.241,012.131,104.79
Capital Expenditure -225.41-251.37-213.90-298.30-306.60-331.26-361.58-394.68-430.81-470.25
Free Cash Flow 251.70403.66804.70-4.60202446.98487.90532.56581.32634.53
WACC
PV LFCF 409.02408.55408.08407.61407.15
SUM PV LFCF 2,040.41

Terminal Value

Growth in perpetuity method:
Long-term growth rate
WACC (%) 9.28
Free cash flow (t + 1) 647.22
Terminal Value 8,890.43
Present Value of Terminal Value 5,704.52

Intrinsic Value

Enterprise Value 7,744.94
Net Debt 1,844.40
Equity Value 5,900.54
Shares Outstanding 60.10
Equity Value Per Share 98.18