Discounted Cash Flow (DCF) Analysis Levered

Strategic Education, Inc. (STRA)

$92.81

-0.12 (-0.13%)

All numbers are in Millions, Currency in USD

Stock DCF: 358.41 | 92.81 | 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	454.85	634.18	997.14	1,027.65	1,131.69	1,442.45	1,838.56	2,343.43	2,986.95	3,807.18
Revenue (%)
Operating Cash Flow	56.15	46.87	202.15	142.90	180.53	201.56	256.91	327.46	417.38	531.99
Operating Cash Flow (%)
Capital Expenditure	-18.05	-27.55	-38.69	-46.81	-49.43	-60.92	-77.64	-98.97	-126.14	-160.78
Capital Expenditure (%)
Free Cash Flow	38.10	19.32	163.46	96.09	131.09	140.64	179.26	228.49	291.23	371.21

Weighted Average Cost Of Capital

Share price	$ 92.81
Beta	0.533
Diluted Shares Outstanding	24.12
Cost of Debt
Tax Rate	28.08
After-tax Cost of Debt	3.60%
Risk-Free Rate
Market Risk Premium
Cost of Equity	6.034
Total Debt	331.46
Total Equity	2,238.76
Total Capital	2,570.22
Debt Weighting	12.90
Equity Weighting	87.10
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	454.85	634.18	997.14	1,027.65	1,131.69	1,442.45	1,838.56	2,343.43	2,986.95	3,807.18
Operating Cash Flow	56.15	46.87	202.15	142.90	180.53	201.56	256.91	327.46	417.38	531.99
Capital Expenditure	-18.05	-27.55	-38.69	-46.81	-49.43	-60.92	-77.64	-98.97	-126.14	-160.78
Free Cash Flow	38.10	19.32	163.46	96.09	131.09	140.64	179.26	228.49	291.23	371.21
WACC
PV LFCF						100.73	121.45	146.42	176.53	212.84
SUM PV LFCF										1,001.01

Terminal Value

Growth in perpetuity method:
Long-term growth rate
WACC (%)	5.72
Free cash flow (t + 1)	378.63
Terminal Value	10,178.28
Present Value of Terminal Value	7,707.06

Intrinsic Value

Enterprise Value	8,708.07
Net Debt	62.54
Equity Value	8,645.54
Shares Outstanding	24.12
Equity Value Per Share	358.41