Discounted Cash Flow (DCF) Analysis Levered

The Charles Schwab Corporation (SCHW)

$64.43

+2.40 (+3.87%)
All numbers are in Millions, Currency in USD
Stock DCF: 369.90 | 64.43 | 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 8,61810,13210,72111,69118,52022,725.9527,887.0934,220.3341,991.8851,528.36
Revenue (%)
Operating Cash Flow 1,26312,4569,3256,8522,11813,390.9016,432.0120,163.7824,743.0330,362.25
Operating Cash Flow (%)
Capital Expenditure -400-570-708-631-916-1,236.94-1,517.86-1,862.57-2,285.56-2,804.62
Capital Expenditure (%)
Free Cash Flow 86311,8868,6176,2211,20212,153.9514,914.1518,301.2122,457.4727,557.63

Weighted Average Cost Of Capital

Share price $ 64.43
Beta 1.089
Diluted Shares Outstanding 1,429
Cost of Debt
Tax Rate 24.09
After-tax Cost of Debt 1.52%
Risk-Free Rate
Market Risk Premium
Cost of Equity 8.267
Total Debt 23,769
Total Equity 92,070.47
Total Capital 115,839.47
Debt Weighting 20.52
Equity Weighting 79.48
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 8,61810,13210,72111,69118,52022,725.9527,887.0934,220.3341,991.8851,528.36
Operating Cash Flow 1,26312,4569,3256,8522,11813,390.9016,432.0120,163.7824,743.0330,362.25
Capital Expenditure -400-570-708-631-916-1,236.94-1,517.86-1,862.57-2,285.56-2,804.62
Free Cash Flow 86311,8868,6176,2211,20212,153.9514,914.1518,301.2122,457.4727,557.63
WACC
PV LFCF 11,371.5913,055.8714,989.6117,209.7719,758.76
SUM PV LFCF 76,385.59

Terminal Value

Growth in perpetuity method:
Long-term growth rate
WACC (%) 6.88
Free cash flow (t + 1) 28,108.78
Terminal Value 575,999.64
Present Value of Terminal Value 412,990.43

Intrinsic Value

Enterprise Value 489,376.02
Net Debt -39,206
Equity Value 528,582.02
Shares Outstanding 1,429
Equity Value Per Share 369.90