Discounted Cash Flow (DCF) Analysis Unlevered
Choice Hotels International, Inc. (CHH)
$111.78
-2.54 (-2.22%)
All numbers are in Millions, Currency in USD
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 | 1,007.36 | 1,041.30 | 1,114.82 | 774.07 | 1,069.30 | 1,117.43 | 1,167.72 | 1,220.28 | 1,275.21 | 1,332.60 |
|---|---|---|---|---|---|---|---|---|---|---|
| Revenue (%) | ||||||||||
| EBITDA | 281.47 | 333.50 | 335.56 | 127.86 | 447.95 | 331.83 | 346.76 | 362.37 | 378.68 | 395.73 |
| EBITDA (%) | ||||||||||
| EBIT | 269.04 | 319.17 | 316.74 | 102.03 | 423.17 | 309.58 | 323.52 | 338.08 | 353.30 | 369.20 |
| EBIT (%) | ||||||||||
| Depreciation | 12.43 | 14.33 | 18.83 | 25.83 | 24.77 | 22.24 | 23.24 | 24.29 | 25.38 | 26.53 |
| 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 | 235.34 | 26.64 | 33.77 | 263.88 | 511.60 | 247.81 | 258.96 | 270.62 | 282.80 | 295.53 |
|---|---|---|---|---|---|---|---|---|---|---|
| Total Cash (%) | ||||||||||
| Account Receivables | 139.36 | 184.90 | 178.10 | 178.16 | 220.11 | 203.74 | 212.91 | 222.50 | 232.51 | 242.98 |
| Account Receivables (%) | ||||||||||
| Inventories | - | - | - | - | - | - | - | - | - | - |
| Inventories (%) | ||||||||||
| Accounts Payable | 63.54 | 73.51 | 73.45 | 83.33 | 81.17 | 85.62 | 89.47 | 93.50 | 97.71 | 102.11 |
| Accounts Payable (%) | ||||||||||
| Capital Expenditure | -25.95 | -49.48 | -64.04 | -34.96 | -77.87 | -55.58 | -58.08 | -60.70 | -63.43 | -66.29 |
| Capital Expenditure (%) |
Weighted Average Cost Of Capital
| Share price | $ 111.78 |
|---|---|
| Beta | 1.342 |
| Diluted Shares Outstanding | 55.91 |
| Cost of Debt | |
| Tax Rate | 23.25 |
| After-tax Cost of Debt | 3.23% |
| Risk-Free Rate | |
| Market Risk Premium | |
| Cost of Equity | 9.174 |
| Total Debt | 1,107.96 |
| Total Equity | 6,249.06 |
| Total Capital | 7,357.02 |
| Debt Weighting | 15.06 |
| Equity Weighting | 84.94 |
| 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 | 1,007.36 | 1,041.30 | 1,114.82 | 774.07 | 1,069.30 | 1,117.43 | 1,167.72 | 1,220.28 | 1,275.21 | 1,332.60 |
|---|---|---|---|---|---|---|---|---|---|---|
| EBITDA | 281.47 | 333.50 | 335.56 | 127.86 | 447.95 | 331.83 | 346.76 | 362.37 | 378.68 | 395.73 |
| EBIT | 269.04 | 319.17 | 316.74 | 102.03 | 423.17 | 309.58 | 323.52 | 338.08 | 353.30 | 369.20 |
| Tax Rate | 48.71% | 20.82% | 17.43% | -42.22% | 23.25% | 13.60% | 13.60% | 13.60% | 13.60% | 13.60% |
| EBIAT | 137.99 | 252.70 | 261.53 | 145.12 | 324.78 | 267.49 | 279.53 | 292.11 | 305.26 | 319 |
| Depreciation | 12.43 | 14.33 | 18.83 | 25.83 | 24.77 | 22.24 | 23.24 | 24.29 | 25.38 | 26.53 |
| Accounts Receivable | - | -45.54 | 6.80 | -0.06 | -41.96 | 16.37 | -9.17 | -9.58 | -10.01 | -10.47 |
| Inventories | - | - | - | - | - | - | - | - | - | - |
| Accounts Payable | - | 9.97 | -0.06 | 9.88 | -2.16 | 4.45 | 3.85 | 4.03 | 4.21 | 4.40 |
| Capital Expenditure | -25.95 | -49.48 | -64.04 | -34.96 | -77.87 | -55.58 | -58.08 | -60.70 | -63.43 | -66.29 |
| UFCF | 124.47 | 181.99 | 223.05 | 145.81 | 227.57 | 254.97 | 239.37 | 250.14 | 261.40 | 273.17 |
| WACC | ||||||||||
| PV UFCF | 235.47 | 204.16 | 197.04 | 190.16 | 183.52 | |||||
| SUM PV UFCF | 1,010.35 |
Terminal Value
| Growth in perpetuity method: | |
|---|---|
| Long-term growth rate | |
| WACC (%) | 8.28 |
| Free cash flow (t + 1) | 278.63 |
| Terminal Value | 4,436.81 |
| Present Value of Terminal Value | 2,980.78 |
Intrinsic Value
| Enterprise Value | 3,991.13 |
|---|---|
| Net Debt | 596.36 |
| Equity Value | 3,394.77 |
| Shares Outstanding | 55.91 |
| Equity Value Per Share | 60.72 |