Discounted Cash Flow (DCF) Analysis Levered

Zynga Inc. (ZNGA)

$8.18

-0.17 (-2.04%)

All numbers are in Millions, Currency in USD

Stock DCF: 63.59 | 8.18 | 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	861.39	907.21	1,321.66	1,974.80	2,800.50	3,796.31	5,146.22	6,976.13	9,456.72	12,819.38
Revenue (%)
Operating Cash Flow	94.58	168.24	262.83	429.20	253.80	608.98	825.53	1,119.07	1,516.99	2,056.41
Operating Cash Flow (%)
Capital Expenditure	-9.97	-11.47	-23.64	-24.80	-16.80	-46.06	-62.43	-84.63	-114.73	-155.52
Capital Expenditure (%)
Free Cash Flow	84.61	156.77	239.19	404.40	237	562.93	763.09	1,034.44	1,402.27	1,900.89

Weighted Average Cost Of Capital

Share price	$ 8.18
Beta	0.023
Diluted Shares Outstanding	1,016.80
Cost of Debt
Tax Rate	-1,170.73
After-tax Cost of Debt	3.96%
Risk-Free Rate
Market Risk Premium
Cost of Equity	4.680
Total Debt	1,494.30
Total Equity	8,317.42
Total Capital	9,811.72
Debt Weighting	15.23
Equity Weighting	84.77
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	861.39	907.21	1,321.66	1,974.80	2,800.50	3,796.31	5,146.22	6,976.13	9,456.72	12,819.38
Operating Cash Flow	94.58	168.24	262.83	429.20	253.80	608.98	825.53	1,119.07	1,516.99	2,056.41
Capital Expenditure	-9.97	-11.47	-23.64	-24.80	-16.80	-46.06	-62.43	-84.63	-114.73	-155.52
Free Cash Flow	84.61	156.77	239.19	404.40	237	562.93	763.09	1,034.44	1,402.27	1,900.89
WACC
PV LFCF						538.32	697.85	904.65	1,172.74	1,520.27
SUM PV LFCF										4,833.84

Terminal Value

Growth in perpetuity method:
Long-term growth rate
WACC (%)	4.57
Free cash flow (t + 1)	1,938.91
Terminal Value	75,443.83
Present Value of Terminal Value	60,337.62

Intrinsic Value

Enterprise Value	65,171.46
Net Debt	510.30
Equity Value	64,661.16
Shares Outstanding	1,016.80
Equity Value Per Share	63.59