Discounted Cash Flow (DCF) Analysis Unlevered

DiamondRock Hospitality Company (DRH)

$7.77

-0.07 (-0.89%)

All numbers are in Millions, Currency in USD

Stock DCF: -19.75 | 7.77 | overvalue

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	863.70	938.09	299.49	567.13	1,001.50	1,268.14	1,605.77	2,033.29	2,574.64	3,260.11
Revenue (%)
EBITDA	215.29	220.29	-81.86	73.86	272.96	155.61	197.05	249.51	315.94	400.05
EBITDA (%)
EBIT	110.55	101.95	-196.80	-29.33	164.11	-78.20	-99.02	-125.38	-158.76	-201.03
EBIT (%)
Depreciation	104.74	118.34	114.95	103.19	108.85	233.81	296.06	374.89	474.70	601.08
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	43.86	122.52	111.80	38.62	67.56	175.07	221.68	280.69	355.43	450.05
Total Cash (%)
Account Receivables	86.91	91.21	69.50	120.67	176.71	207.75	263.06	333.10	421.79	534.08
Account Receivables (%)
Inventories	47.74	57.27	23.05	36.89	64.68	81.90	103.70	131.31	166.27	210.54
Inventories (%)
Accounts Payable	124.07	154.39	141.95	136.73	166.80	301.78	382.13	483.86	612.69	775.81
Accounts Payable (%)
Capital Expenditure	-115.17	-199.26	-89.64	-47.13	-249.60	-247.89	-313.89	-397.46	-503.28	-637.27
Capital Expenditure (%)

Weighted Average Cost Of Capital

Share price	$ 7.77
Beta	1.638
Diluted Shares Outstanding	213.19
Cost of Debt
Tax Rate	2.66
After-tax Cost of Debt	2.98%
Risk-Free Rate
Market Risk Premium
Cost of Equity	12.169
Total Debt	1,296.67
Total Equity	1,656.48
Total Capital	2,953.15
Debt Weighting	43.91
Equity Weighting	56.09
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	863.70	938.09	299.49	567.13	1,001.50	1,268.14	1,605.77	2,033.29	2,574.64	3,260.11
EBITDA	215.29	220.29	-81.86	73.86	272.96	155.61	197.05	249.51	315.94	400.05
EBIT	110.55	101.95	-196.80	-29.33	164.11	-78.20	-99.02	-125.38	-158.76	-201.03
Tax Rate	3.42%	11.03%	6.26%	-1.70%	2.66%	4.33%	4.33%	4.33%	4.33%	4.33%
EBIAT	106.76	90.71	-184.48	-29.83	159.75	-74.81	-94.72	-119.94	-151.88	-192.31
Depreciation	104.74	118.34	114.95	103.19	108.85	233.81	296.06	374.89	474.70	601.08
Accounts Receivable	-	-4.29	21.71	-51.18	-56.04	-31.04	-55.31	-70.04	-88.68	-112.30
Inventories	-	-9.53	34.22	-13.84	-27.79	-17.22	-21.80	-27.61	-34.96	-44.27
Accounts Payable	-	30.32	-12.44	-5.22	30.07	134.98	80.35	101.74	128.82	163.12
Capital Expenditure	-115.17	-199.26	-89.64	-47.13	-249.60	-247.89	-313.89	-397.46	-503.28	-637.27
UFCF	96.33	26.28	-115.68	-44	-34.76	-2.17	-109.32	-138.43	-175.28	-221.95
WACC
PV UFCF						-2.01	-93.50	-109.49	-128.22	-150.15
SUM PV UFCF										-483.37

Terminal Value

Growth in perpetuity method:
Long-term growth rate
WACC (%)	8.13
Free cash flow (t + 1)	-226.39
Terminal Value	-3,693.15
Present Value of Terminal Value	-2,498.43

Intrinsic Value

Enterprise Value	-2,981.80
Net Debt	1,229.10
Equity Value	-4,210.90
Shares Outstanding	213.19
Equity Value Per Share	-19.75