Discounted Cash Flow (DCF) Analysis Unlevered

Activision Blizzard, Inc. (ATVI)

$92.495

-0.07 (-0.07%)

All numbers are in Millions, Currency in USD

Stock DCF: 95.70 | 92.495 | undervalue

Operating Data

Year A/P	2019 Actual	2020 Actual	2021 Actual	2022 Actual	2023 Projected	2024 Projected	2025 Projected	2026 Projected	2027 Projected	2028 Projected
Revenue	6,489	8,086	8,803	7,528	8,004.63	8,511.44	9,050.34	9,623.36	10,232.66	10,880.53
Revenue (%)
EBITDA	2,424	3,399	3,853	2,168	3,040.95	3,233.49	3,438.21	3,655.90	3,887.37	4,133.50
EBITDA (%)
EBIT	1,871	2,953	3,413	1,849	2,937.95	2,815.40	2,993.65	3,183.19	3,384.74	3,599.04
EBIT (%)
Depreciation	553	446	440	319	103	418.09	444.56	472.71	502.64	534.46
Depreciation (%)

Balance Sheet Data

Year A/P	2019 Actual	2020 Actual	2021 Actual	2022 Actual	2023 Projected	2024 Projected	2025 Projected	2026 Projected	2027 Projected	2028 Projected
Total Cash	5,794	8,647	10,423	11,992	9,484.07	10,084.55	10,723.04	11,401.97	12,123.88	12,891.50
Total Cash (%)
Account Receivables	848	1,052	972	1,204	1,062.89	1,130.19	1,201.74	1,277.83	1,358.74	1,444.76
Account Receivables (%)
Inventories	32	39.88	43.41	37.12	39.47	41.97	44.63	47.46	50.46	53.66
Inventories (%)
Accounts Payable	292	295	285	324	313.98	333.85	354.99	377.47	401.37	426.78
Accounts Payable (%)
Capital Expenditure	-116	-78	-80	-91	-97.45	-103.62	-110.18	-117.16	-124.58	-132.47
Capital Expenditure (%)

Weighted Average Cost Of Capital

Share price	$ 92.495
Beta	0.444
Diluted Shares Outstanding	789
Cost of Debt
Tax Rate	13.25
After-tax Cost of Debt	2.59%
Risk-Free Rate
Market Risk Premium
Cost of Equity	6.572
Total Debt	3,611
Total Equity	72,978.55
Total Capital	76,589.55
Debt Weighting	4.71
Equity Weighting	95.29
Wacc

Build Up Free Cash

Year A/P	2019 Actual	2020 Actual	2021 Actual	2022 Actual	2023 Projected	2024 Projected	2025 Projected	2026 Projected	2027 Projected	2028 Projected
Revenue	6,489	8,086	8,803	7,528	8,004.63	8,511.44	9,050.34	9,623.36	10,232.66	10,880.53
EBITDA	2,424	3,399	3,853	2,168	3,040.95	3,233.49	3,438.21	3,655.90	3,887.37	4,133.50
EBIT	1,871	2,953	3,413	1,849	2,937.95	2,815.40	2,993.65	3,183.19	3,384.74	3,599.04
Tax Rate	7.96%	16.02%	14.70%	13.25%	12.98%	12.98%	12.98%	12.98%	12.98%	12.98%
EBIAT	1,722.05	2,480.02	2,911.41	1,604.09	2,556.61	2,449.96	2,605.08	2,770.02	2,945.40	3,131.89
Depreciation	553	446	440	319	103	418.09	444.56	472.71	502.64	534.46
Accounts Receivable	-	-204	80	-232	141.11	-67.30	-71.56	-76.09	-80.91	-86.03
Inventories	-	-7.88	-3.54	6.29	-2.35	-2.50	-2.66	-2.83	-3	-3.19
Accounts Payable	-	3	-10	39	-10.02	19.88	21.14	22.48	23.90	25.41
Capital Expenditure	-116	-78	-80	-91	-97.45	-103.62	-110.18	-117.16	-124.58	-132.47
UFCF	2,159.05	2,639.15	3,337.87	1,645.38	2,690.89	2,714.51	2,886.38	3,069.13	3,263.45	3,470.07
WACC
PV UFCF					2,690.89	2,551.71	2,550.55	2,549.38	2,548.22	2,547.05
SUM PV UFCF										12,746.91

Terminal Value

Growth in perpetuity method:
Long-term growth rate
WACC (%)	6.38
Free cash flow (t + 1)	3,539.47
Terminal Value	80,809.85
Present Value of Terminal Value	59,314.98

Intrinsic Value

Enterprise Value	72,061.88
Net Debt	-3,449
Equity Value	75,510.88
Shares Outstanding	789
Equity Value Per Share	95.70