Discounted Cash Flow (DCF) Analysis Levered

Zendesk, Inc. (ZEN)

$77.48

+0.02 (+0.03%)

All numbers are in Millions, Currency in USD

Stock DCF: 25.91 | 77.48 | overvalue

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	430.49	598.75	816.42	1,029.56	1,338.60	1,778.88	2,363.96	3,141.49	4,174.74	5,547.84
Revenue (%)
Operating Cash Flow	42.10	78.62	89.26	26.43	169.76	174.66	232.10	308.44	409.89	544.70
Operating Cash Flow (%)
Capital Expenditure	-23.92	-42.33	-46.98	-38.52	-29.07	-86.43	-114.86	-152.63	-202.84	-269.55
Capital Expenditure (%)
Free Cash Flow	18.18	36.29	42.28	-12.09	140.69	88.23	117.24	155.81	207.05	275.15

Weighted Average Cost Of Capital

Share price	$ 77.48
Beta	0.885
Diluted Shares Outstanding	115.24
Cost of Debt
Tax Rate	-3.17
After-tax Cost of Debt	4.88%
Risk-Free Rate
Market Risk Premium
Cost of Equity	8.617
Total Debt	1,203.55
Total Equity	8,928.80
Total Capital	10,132.35
Debt Weighting	11.88
Equity Weighting	88.12
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	430.49	598.75	816.42	1,029.56	1,338.60	1,778.88	2,363.96	3,141.49	4,174.74	5,547.84
Operating Cash Flow	42.10	78.62	89.26	26.43	169.76	174.66	232.10	308.44	409.89	544.70
Capital Expenditure	-23.92	-42.33	-46.98	-38.52	-29.07	-86.43	-114.86	-152.63	-202.84	-269.55
Free Cash Flow	18.18	36.29	42.28	-12.09	140.69	88.23	117.24	155.81	207.05	275.15
WACC
PV LFCF						81.56	100.20	123.10	151.23	185.80
SUM PV LFCF										641.90

Terminal Value

Growth in perpetuity method:
Long-term growth rate
WACC (%)	8.17
Free cash flow (t + 1)	280.66
Terminal Value	4,548.71
Present Value of Terminal Value	3,071.52

Intrinsic Value

Enterprise Value	3,713.42
Net Debt	727.45
Equity Value	2,985.97
Shares Outstanding	115.24
Equity Value Per Share	25.91