Discounted Cash Flow (DCF) Analysis Levered

STEP Energy Services Ltd. (STEP.TO)

$3.15

+0.07 (+2.27%)

All numbers are in Millions, Currency in USD

Stock DCF: 8.46 | 3.15 | 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	781.76	668.30	368.95	536.31	989.02	1,163.25	1,368.18	1,609.21	1,892.70	2,226.14
Revenue (%)
Operating Cash Flow	110.90	69.94	46.80	58.85	122.60	141.23	166.11	195.37	229.79	270.28
Operating Cash Flow (%)
Capital Expenditure	-115.45	-49.06	-17.83	-37.24	-82.98	-98.35	-115.68	-136.06	-160.03	-188.22
Capital Expenditure (%)
Free Cash Flow	-4.55	20.88	28.98	21.60	39.62	42.88	50.43	59.32	69.76	82.06

Weighted Average Cost Of Capital

Share price	$ 3.15
Beta	2.577
Diluted Shares Outstanding	68.01
Cost of Debt
Tax Rate	21.44
After-tax Cost of Debt	5.69%
Risk-Free Rate
Market Risk Premium
Cost of Equity	15.707
Total Debt	162.98
Total Equity	214.22
Total Capital	377.20
Debt Weighting	43.21
Equity Weighting	56.79
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	781.76	668.30	368.95	536.31	989.02	1,163.25	1,368.18	1,609.21	1,892.70	2,226.14
Operating Cash Flow	110.90	69.94	46.80	58.85	122.60	141.23	166.11	195.37	229.79	270.28
Capital Expenditure	-115.45	-49.06	-17.83	-37.24	-82.98	-98.35	-115.68	-136.06	-160.03	-188.22
Free Cash Flow	-4.55	20.88	28.98	21.60	39.62	42.88	50.43	59.32	69.76	82.06
WACC
PV LFCF						38.50	40.65	42.93	45.33	47.87
SUM PV LFCF										215.28

Terminal Value

Growth in perpetuity method:
Long-term growth rate
WACC (%)	11.38
Free cash flow (t + 1)	83.70
Terminal Value	892.28
Present Value of Terminal Value	520.56

Intrinsic Value

Enterprise Value	735.84
Net Debt	160.19
Equity Value	575.64
Shares Outstanding	68.01
Equity Value Per Share	8.46