Discounted Cash Flow (DCF) Analysis Unlevered

Centene Corporation (CNC)

$64.05

+1.47 (+2.35%)

All numbers are in Millions, Currency in USD

Stock DCF: 324.68 | 64.05 | undervalue

Operating Data

Year A/P	2018 Actual	2019 Actual	2020 Actual	2021 Actual	2022 Actual	2023 Projected	2024 Projected	2025 Projected	2026 Projected	2027 Projected
Revenue	60,116	74,639	111,115	125,982	144,547	181,097.25	226,889.61	284,261.06	356,139.49	446,193.15
Revenue (%)
EBITDA	2,212	2,849	4,774	3,965	4,180	6,458.69	8,091.84	10,137.95	12,701.44	15,913.13
EBITDA (%)
EBIT	1,717	2,206	3,515	2,489	2,627	4,624.56	5,793.93	7,258.99	9,094.50	11,394.14
EBIT (%)
Depreciation	495	643	1,259	1,476	1,553	1,834.13	2,297.91	2,878.96	3,606.93	4,518.99
Depreciation (%)

Balance Sheet Data

Year A/P	2018 Actual	2019 Actual	2020 Actual	2021 Actual	2022 Actual	2023 Projected	2024 Projected	2025 Projected	2026 Projected	2027 Projected
Total Cash	6,064	12,986	12,380	14,657	14,395	21,811.38	27,326.62	34,236.45	42,893.50	53,739.58
Total Cash (%)
Account Receivables	5,150	6,247	9,696	12,238	13,272	16,138.79	20,219.66	25,332.41	31,737.98	39,763.27
Account Receivables (%)
Inventories	-	-	-	-	-	-	-	-	-	-
Inventories (%)
Accounts Payable	4,051	4,164	6,865	8,493	9,525	11,527.48	14,442.32	18,094.22	22,669.54	28,401.77
Accounts Payable (%)
Capital Expenditure	-675	-730	-869	-910	-1,004	-1,557.38	-1,951.18	-2,444.56	-3,062.69	-3,837.13
Capital Expenditure (%)

Weighted Average Cost Of Capital

Share price	$ 64.05
Beta	0.561
Diluted Shares Outstanding	582.04
Cost of Debt
Tax Rate	38.74
After-tax Cost of Debt	2.26%
Risk-Free Rate
Market Risk Premium
Cost of Equity	6.027
Total Debt	18,020
Total Equity	37,279.66
Total Capital	55,299.66
Debt Weighting	32.59
Equity Weighting	67.41
Wacc

Build Up Free Cash

Year A/P	2018 Actual	2019 Actual	2020 Actual	2021 Actual	2022 Actual	2023 Projected	2024 Projected	2025 Projected	2026 Projected	2027 Projected
Revenue	60,116	74,639	111,115	125,982	144,547	181,097.25	226,889.61	284,261.06	356,139.49	446,193.15
EBITDA	2,212	2,849	4,774	3,965	4,180	6,458.69	8,091.84	10,137.95	12,701.44	15,913.13
EBIT	1,717	2,206	3,515	2,489	2,627	4,624.56	5,793.93	7,258.99	9,094.50	11,394.14
Tax Rate	34.21%	25.87%	34.80%	25.70%	38.74%	31.86%	31.86%	31.86%	31.86%	31.86%
EBIAT	1,129.61	1,635.31	2,291.79	1,849.25	1,609.41	3,151	3,947.76	4,945.99	6,196.64	7,763.53
Depreciation	495	643	1,259	1,476	1,553	1,834.13	2,297.91	2,878.96	3,606.93	4,518.99
Accounts Receivable	-	-1,097	-3,449	-2,542	-1,034	-2,866.79	-4,080.87	-5,112.76	-6,405.57	-8,025.29
Inventories	-	-	-	-	-	-	-	-	-	-
Accounts Payable	-	113	2,701	1,628	1,032	2,002.48	2,914.85	3,651.90	4,575.32	5,732.23
Capital Expenditure	-675	-730	-869	-910	-1,004	-1,557.38	-1,951.18	-2,444.56	-3,062.69	-3,837.13
UFCF	949.61	564.31	1,933.78	1,501.25	2,156.40	2,563.43	3,128.47	3,919.53	4,910.63	6,152.33
WACC
PV UFCF						2,446.02	2,848.45	3,405.26	4,070.91	4,866.69
SUM PV UFCF										17,637.34

Terminal Value

Growth in perpetuity method:
Long-term growth rate
WACC (%)	4.80
Free cash flow (t + 1)	6,275.38
Terminal Value	224,120.70
Present Value of Terminal Value	177,286.45

Intrinsic Value

Enterprise Value	194,923.79
Net Debt	5,946
Equity Value	188,977.79
Shares Outstanding	582.04
Equity Value Per Share	324.68