Discounted Cash Flow (DCF) Analysis Unlevered

Applied Materials, Inc. (AMAT)

$119.48

+4.41 (+3.83%)

All numbers are in Millions, Currency in USD

Stock DCF: 102.29 | 119.48 | overvalue

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	14,698	16,705	14,608	17,202	23,063	26,114.86	29,570.56	33,483.54	37,914.32	42,931.41
Revenue (%)
EBITDA	4,421	5,110	3,893	4,782	7,401	7,688.62	8,706.03	9,858.08	11,162.57	12,639.68
EBITDA (%)
EBIT	4,014	4,653	3,530	4,406	7,007	7,067.93	8,003.21	9,062.25	10,261.43	11,619.29
EBIT (%)
Depreciation	407	457	363	376	394	620.69	702.83	795.83	901.14	1,020.38
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	7,276	4,030	3,618	5,738	5,459	8,117.63	9,191.81	10,408.13	11,785.41	13,344.94
Total Cash (%)
Account Receivables	2,395	2,462	2,737	3,125	4,953	4,669.94	5,287.90	5,987.63	6,779.96	7,677.13
Account Receivables (%)
Inventories	2,930	3,721	3,474	3,904	4,309	5,607.88	6,349.96	7,190.23	8,141.69	9,219.05
Inventories (%)
Accounts Payable	945	996	958	1,124	1,472	1,664.37	1,884.62	2,134	2,416.39	2,736.14
Accounts Payable (%)
Capital Expenditure	-345	-622	-441	-422	-668	-754.16	-853.95	-966.95	-1,094.91	-1,239.79
Capital Expenditure (%)

Weighted Average Cost Of Capital

Share price	$ 119.48
Beta	1.438
Diluted Shares Outstanding	919
Cost of Debt
Tax Rate	13.04
After-tax Cost of Debt	3.57%
Risk-Free Rate
Market Risk Premium
Cost of Equity	9.530
Total Debt	5,753
Total Equity	109,802.12
Total Capital	115,555.12
Debt Weighting	4.98
Equity Weighting	95.02
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	14,698	16,705	14,608	17,202	23,063	26,114.86	29,570.56	33,483.54	37,914.32	42,931.41
EBITDA	4,421	5,110	3,893	4,782	7,401	7,688.62	8,706.03	9,858.08	11,162.57	12,639.68
EBIT	4,014	4,653	3,530	4,406	7,007	7,067.93	8,003.21	9,062.25	10,261.43	11,619.29
Tax Rate	7.78%	30.89%	17.22%	13.13%	13.04%	16.41%	16.41%	16.41%	16.41%	16.41%
EBIAT	3,701.59	3,215.61	2,922.05	3,827.49	6,093.22	5,907.83	6,689.59	7,574.80	8,577.16	9,712.14
Depreciation	407	457	363	376	394	620.69	702.83	795.83	901.14	1,020.38
Accounts Receivable	-	-67	-275	-388	-1,828	283.06	-617.96	-699.73	-792.33	-897.17
Inventories	-	-791	247	-430	-405	-1,298.88	-742.07	-840.27	-951.46	-1,077.37
Accounts Payable	-	51	-38	166	348	192.37	220.24	249.39	282.39	319.75
Capital Expenditure	-345	-622	-441	-422	-668	-754.16	-853.95	-966.95	-1,094.91	-1,239.79
UFCF	3,763.59	2,243.61	2,778.05	3,129.49	3,934.22	4,950.91	5,398.67	6,113.06	6,921.99	7,837.95
WACC
PV UFCF						4,532.56	4,524.84	4,690.65	4,862.54	5,040.73
SUM PV UFCF										23,651.31

Terminal Value

Growth in perpetuity method:
Long-term growth rate
WACC (%)	9.23
Free cash flow (t + 1)	7,994.71
Terminal Value	110,576.95
Present Value of Terminal Value	71,113.97

Intrinsic Value

Enterprise Value	94,765.28
Net Debt	758
Equity Value	94,007.28
Shares Outstanding	919
Equity Value Per Share	102.29