Discounted Cash Flow (DCF) Analysis Unlevered

Choice Hotels International, Inc. (CHH)

$113.22

+1.05 (+0.94%)
All numbers are in Millions, Currency in USD
Stock DCF: 173.37 | 113.22 | undervalue

Operating Data

Year
A/P
2019
Actual
2020
Actual
2021
Actual
2022
Actual
2023
Actual
2024
Projected
2025
Projected
2026
Projected
2027
Projected
2028
Projected
Revenue 1,114.82774.071,069.301,401.951,544.171,732.661,944.162,181.482,447.782,746.57
Revenue (%)
EBITDA 374.98181.81473.93528.27531.57601.41674.82757.19849.62953.33
EBITDA (%)
EBIT 338.85133.35423.44464.35455.83519.33582.72653.85733.67823.23
EBIT (%)
Depreciation 36.1248.4650.4963.9175.7382.0892.10103.34115.95130.11
Depreciation (%)

Balance Sheet Data

Year
A/P
2019
Actual
2020
Actual
2021
Actual
2022
Actual
2023
Actual
2024
Projected
2025
Projected
2026
Projected
2027
Projected
2028
Projected
Total Cash 33.77234.78511.6041.5726.75297.68334.01374.79420.54471.87
Total Cash (%)
Account Receivables 141.57149.92153.15216.61230.94266.12298.61335.06375.96421.85
Account Receivables (%)
Inventories ----34.6712.9714.5516.3318.3220.55
Inventories (%)
Accounts Payable 73.4583.3381.17118.86131.28145.28163.02182.92205.24230.30
Accounts Payable (%)
Capital Expenditure -64.04-39.95-77.87-93.59-118.29-112.71-126.46-141.90-159.22-178.66
Capital Expenditure (%)

Weighted Average Cost Of Capital

Share price $ 113.22
Beta 1.233
Diluted Shares Outstanding 50.70
Cost of Debt
Tax Rate 23.28
After-tax Cost of Debt 3.28%
Risk-Free Rate
Market Risk Premium
Cost of Equity 10.093
Total Debt 1,681.74
Total Equity 5,740.25
Total Capital 7,421.99
Debt Weighting 22.66
Equity Weighting 77.34
Wacc

Build Up Free Cash

Year
A/P
2019
Actual
2020
Actual
2021
Actual
2022
Actual
2023
Actual
2024
Projected
2025
Projected
2026
Projected
2027
Projected
2028
Projected
Revenue 1,114.82774.071,069.301,401.951,544.171,732.661,944.162,181.482,447.782,746.57
EBITDA 374.98181.81473.93528.27531.57601.41674.82757.19849.62953.33
EBIT 338.85133.35423.44464.35455.83519.33582.72653.85733.67823.23
Tax Rate 17.43%-42.22%23.25%23.96%23.28%9.14%9.14%9.14%9.14%9.14%
EBIAT 279.79189.66324.99353.10349.71471.86529.46594.09666.61747.99
Depreciation 36.1248.4650.4963.9175.7382.0892.10103.34115.95130.11
Accounts Receivable --8.36-3.23-63.47-14.33-35.18-32.49-36.45-40.90-45.89
Inventories -----21.70-1.58-1.78-1.99-2.24
Accounts Payable -9.88-2.1637.6912.421417.7319.9022.3325.05
Capital Expenditure -64.04-39.95-77.87-93.58-118.29-112.71-126.46-141.90-159.22-178.66
UFCF 251.87199.68292.23297.65305.24441.76478.76537.21602.78676.36
WACC
PV UFCF 406.96406.31420434.15448.78
SUM PV UFCF 2,116.21

Terminal Value

Growth in perpetuity method:
Long-term growth rate
WACC (%) 8.55
Free cash flow (t + 1) 696.65
Terminal Value 12,552.31
Present Value of Terminal Value 8,328.65

Intrinsic Value

Enterprise Value 10,444.86
Net Debt 1,654.99
Equity Value 8,789.87
Shares Outstanding 50.70
Equity Value Per Share 173.37