Discounted Cash Flow (DCF) Analysis Unlevered

Arch Capital Group Ltd. (ACGL)

$60.56

+0.41 (+0.68%)
All numbers are in Millions, Currency in USD
Stock DCF: 87.44 | 60.56 | undervalue

Operating Data

Year
A/P
2017
Actual
2018
Actual
2019
Actual
2020
Actual
2021
Actual
2022
Projected
2023
Projected
2024
Projected
2025
Projected
2026
Projected
Revenue 5,369.315,474.336,783.928,308.558,926.1510,171.0311,589.5213,205.8515,047.6017,146.20
Revenue (%)
EBITDA 990.061,098.081,995.101,729.852,507.862,376.422,707.843,085.493,515.814,006.13
EBITDA (%)
EBIT 864.28992.411,9131,660.812,424.902,229.072,539.952,894.183,297.823,757.75
EBIT (%)
Depreciation 125.78105.6782.1069.0382.96147.34167.89191.31217.99248.39
Depreciation (%)

Balance Sheet Data

Year
A/P
2017
Actual
2018
Actual
2019
Actual
2020
Actual
2021
Actual
2022
Projected
2023
Projected
2024
Projected
2025
Projected
2026
Projected
Total Cash 16,447.0516,640.3519,416.2322,994.0222,395.6628,970.0733,010.3737,614.1442,859.9848,837.42
Total Cash (%)
Account Receivables 5,653.816,297.638,244.998,552.3110,342.7111,405.3612,99614,808.4816,873.7419,227.03
Account Receivables (%)
Inventories ----------
Inventories (%)
Accounts Payable 2,301.912,472.222,786.532,678.823,415.384,060.514,626.815,272.096,007.366,845.17
Accounts Payable (%)
Capital Expenditure -22.84-29.81-37.84-39.87-41.39-50.27-57.28-65.27-74.37-84.75
Capital Expenditure (%)

Weighted Average Cost Of Capital

Share price $ 60.56
Beta 0.782
Diluted Shares Outstanding 400.35
Cost of Debt
Tax Rate -2.54
After-tax Cost of Debt 5.12%
Risk-Free Rate
Market Risk Premium
Cost of Equity 7.182
Total Debt 2,724.39
Total Equity 24,244.95
Total Capital 26,969.34
Debt Weighting 10.10
Equity Weighting 89.90
Wacc

Build Up Free Cash

Year
A/P
2017
Actual
2018
Actual
2019
Actual
2020
Actual
2021
Actual
2022
Projected
2023
Projected
2024
Projected
2025
Projected
2026
Projected
Revenue 5,369.315,474.336,783.928,308.558,926.1510,171.0311,589.5213,205.8515,047.6017,146.20
EBITDA 990.061,098.081,995.101,729.852,507.862,376.422,707.843,085.493,515.814,006.13
EBIT 864.28992.411,9131,660.812,424.902,229.072,539.952,894.183,297.823,757.75
Tax Rate 18.22%9.96%11.51%10.90%-2.54%9.61%9.61%9.61%9.61%9.61%
EBIAT 706.78893.611,692.861,479.712,486.582,014.872,295.872,616.072,980.913,396.65
Depreciation 125.78105.6782.1069.0382.96147.34167.89191.31217.99248.39
Accounts Receivable --643.83-1,947.36-307.32-1,790.39-1,062.65-1,590.64-1,812.48-2,065.26-2,353.29
Inventories ----------
Accounts Payable -170.31314.31-107.71736.56645.13566.30645.28735.27837.81
Capital Expenditure -22.84-29.81-37.84-39.87-41.39-50.27-57.28-65.27-74.37-84.75
UFCF 809.72495.95104.081,093.841,474.301,694.421,382.141,574.901,794.542,044.81
WACC
PV UFCF 1,584.021,207.891,286.671,370.581,459.97
SUM PV UFCF 6,909.12

Terminal Value

Growth in perpetuity method:
Long-term growth rate
WACC (%) 6.97
Free cash flow (t + 1) 2,085.71
Terminal Value 41,965.99
Present Value of Terminal Value 29,963.15

Intrinsic Value

Enterprise Value 36,872.28
Net Debt 1,865.73
Equity Value 35,006.55
Shares Outstanding 400.35
Equity Value Per Share 87.44