Discounted Cash Flow (DCF) Analysis Levered

Superior Drilling Products, Inc. (SDPI)

$0.7999

-0.01 (-1.25%)

All numbers are in Millions, Currency in USD

Stock DCF: 0.94 | 0.7999 | 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	18.25	19	10.47	13.34	19.10	20.52	22.05	23.69	25.46	27.36
Revenue (%)
Operating Cash Flow	4.63	0.94	0.58	0.53	3.55	2.39	2.57	2.76	2.97	3.19
Operating Cash Flow (%)
Capital Expenditure	-0.75	-0.51	-0.22	-0.94	-3.33	-1.37	-1.47	-1.58	-1.70	-1.82
Capital Expenditure (%)
Free Cash Flow	3.89	0.43	0.35	-0.41	0.22	1.03	1.10	1.18	1.27	1.37

Weighted Average Cost Of Capital

Share price	$ 0.7,999
Beta	0.205
Diluted Shares Outstanding	28.68
Cost of Debt
Tax Rate	15.47
After-tax Cost of Debt	7.64%
Risk-Free Rate
Market Risk Premium
Cost of Equity	5.539
Total Debt	6.34
Total Equity	22.94
Total Capital	29.27
Debt Weighting	21.64
Equity Weighting	78.36
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	18.25	19	10.47	13.34	19.10	20.52	22.05	23.69	25.46	27.36
Operating Cash Flow	4.63	0.94	0.58	0.53	3.55	2.39	2.57	2.76	2.97	3.19
Capital Expenditure	-0.75	-0.51	-0.22	-0.94	-3.33	-1.37	-1.47	-1.58	-1.70	-1.82
Free Cash Flow	3.89	0.43	0.35	-0.41	0.22	1.03	1.10	1.18	1.27	1.37
WACC
PV LFCF						0.97	0.98	0.99	1.01	1.02
SUM PV LFCF										4.97

Terminal Value

Growth in perpetuity method:
Long-term growth rate
WACC (%)	5.99
Free cash flow (t + 1)	1.39
Terminal Value	34.95
Present Value of Terminal Value	26.13

Intrinsic Value

Enterprise Value	31.10
Net Debt	4.18
Equity Value	26.92
Shares Outstanding	28.68
Equity Value Per Share	0.94