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
Stock DCF: 60.72 | 111.78 | 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 1,007.361,041.301,114.82774.071,069.301,117.431,167.721,220.281,275.211,332.60
Revenue (%)
EBITDA 281.47333.50335.56127.86447.95331.83346.76362.37378.68395.73
EBITDA (%)
EBIT 269.04319.17316.74102.03423.17309.58323.52338.08353.30369.20
EBIT (%)
Depreciation 12.4314.3318.8325.8324.7722.2423.2424.2925.3826.53
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 235.3426.6433.77263.88511.60247.81258.96270.62282.80295.53
Total Cash (%)
Account Receivables 139.36184.90178.10178.16220.11203.74212.91222.50232.51242.98
Account Receivables (%)
Inventories ----------
Inventories (%)
Accounts Payable 63.5473.5173.4583.3381.1785.6289.4793.5097.71102.11
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 1,007.361,041.301,114.82774.071,069.301,117.431,167.721,220.281,275.211,332.60
EBITDA 281.47333.50335.56127.86447.95331.83346.76362.37378.68395.73
EBIT 269.04319.17316.74102.03423.17309.58323.52338.08353.30369.20
Tax Rate 48.71%20.82%17.43%-42.22%23.25%13.60%13.60%13.60%13.60%13.60%
EBIAT 137.99252.70261.53145.12324.78267.49279.53292.11305.26319
Depreciation 12.4314.3318.8325.8324.7722.2423.2424.2925.3826.53
Accounts Receivable --45.546.80-0.06-41.9616.37-9.17-9.58-10.01-10.47
Inventories ----------
Accounts Payable -9.97-0.069.88-2.164.453.854.034.214.40
Capital Expenditure -25.95-49.48-64.04-34.96-77.87-55.58-58.08-60.70-63.43-66.29
UFCF 124.47181.99223.05145.81227.57254.97239.37250.14261.40273.17
WACC
PV UFCF 235.47204.16197.04190.16183.52
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