Discounted Cash Flow (DCF) Analysis Levered

The RMR Group Inc. (RMR)

$30.42

+0.58 (+1.94%)

All numbers are in Millions, Currency in USD

Stock DCF: 201.58 | 30.42 | 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	404.98	713.37	589.51	607.24	832.50	1,038.32	1,295.02	1,615.19	2,014.51	2,512.55
Revenue (%)
Operating Cash Flow	228.47	198.21	77.50	71.79	101.27	251.97	314.26	391.96	488.86	609.72
Operating Cash Flow (%)
Capital Expenditure	-0.65	-0.70	-0.60	-1.14	-1.12	-1.42	-1.77	-2.21	-2.75	-3.43
Capital Expenditure (%)
Free Cash Flow	227.82	197.51	76.90	70.65	100.15	250.55	312.49	389.75	486.11	606.29

Weighted Average Cost Of Capital

Share price	$ 30.42
Beta	1.462
Diluted Shares Outstanding	31.35
Cost of Debt
Tax Rate	62.51
After-tax Cost of Debt	1.63%
Risk-Free Rate
Market Risk Premium
Cost of Equity	10.418
Total Debt	30.32
Total Equity	953.61
Total Capital	983.93
Debt Weighting	3.08
Equity Weighting	96.92
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	404.98	713.37	589.51	607.24	832.50	1,038.32	1,295.02	1,615.19	2,014.51	2,512.55
Operating Cash Flow	228.47	198.21	77.50	71.79	101.27	251.97	314.26	391.96	488.86	609.72
Capital Expenditure	-0.65	-0.70	-0.60	-1.14	-1.12	-1.42	-1.77	-2.21	-2.75	-3.43
Free Cash Flow	227.82	197.51	76.90	70.65	100.15	250.55	312.49	389.75	486.11	606.29
WACC
PV LFCF						227.46	257.56	291.63	330.21	373.90
SUM PV LFCF										1,480.76

Terminal Value

Growth in perpetuity method:
Long-term growth rate
WACC (%)	10.15
Free cash flow (t + 1)	618.41
Terminal Value	7,587.87
Present Value of Terminal Value	4,679.48

Intrinsic Value

Enterprise Value	6,160.24
Net Debt	-158.77
Equity Value	6,319
Shares Outstanding	31.35
Equity Value Per Share	201.58