Discounted Cash Flow (DCF) Analysis Unlevered

First American Financial Corporatio... (FAF)

$46.1

+0.12 (+0.26%)
All numbers are in Millions, Currency in USD
Stock DCF: 247.40 | 46.1 | undervalue

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 5,772.365,747.846,199.237,080.959,21410,406.6411,753.6613,275.0314,993.3216,934.03
Revenue (%)
EBITDA 610.56775.041,079.401,125.651,8641,615.111,824.172,060.292,326.972,628.16
EBITDA (%)
EBIT 482.50649.11950.38976.671,7061,400.541,581.831,786.582,017.832,279.01
EBIT (%)
Depreciation 128.05125.93129.02148.98158214.57242.34273.71309.14349.15
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 1,428.561,503.341,530.381,321.321,2862,252.142,543.662,872.903,244.773,664.76
Total Cash (%)
Account Receivables 349.76413622.811,134.351,0171,047.921,183.561,336.751,509.781,705.20
Account Receivables (%)
Inventories ----------
Inventories (%)
Accounts Payable 68.4647.0858.5856.048797.52110.14124.40140.50158.69
Accounts Payable (%)
Capital Expenditure -134.21-118.17-106.98-114.08-161-197-222.50-251.30-283.82-320.56
Capital Expenditure (%)

Weighted Average Cost Of Capital

Share price $ 46.1
Beta 1.229
Diluted Shares Outstanding 111.37
Cost of Debt
Tax Rate 24.42
After-tax Cost of Debt 2.21%
Risk-Free Rate
Market Risk Premium
Cost of Equity 9.603
Total Debt 2,460
Total Equity 5,134.06
Total Capital 7,594.06
Debt Weighting 32.39
Equity Weighting 67.61
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 5,772.365,747.846,199.237,080.959,21410,406.6411,753.6613,275.0314,993.3216,934.03
EBITDA 610.56775.041,079.401,125.651,8641,615.111,824.172,060.292,326.972,628.16
EBIT 482.50649.11950.38976.671,7061,400.541,581.831,786.582,017.832,279.01
Tax Rate 5.00%22.15%21.83%24.57%24.42%19.60%19.60%19.60%19.60%19.60%
EBIAT 458.36505.30742.87736.711,289.371,126.081,271.841,436.471,622.401,832.40
Depreciation 128.05125.93129.02148.98158214.57242.34273.71309.14349.15
Accounts Receivable --63.25-209.81-511.54117.35-30.92-135.64-153.20-173.03-195.42
Inventories ----------
Accounts Payable --21.3811.50-2.5430.9610.5212.6214.2616.1018.19
Capital Expenditure -134.21-118.17-106.98-114.08-161-197-222.50-251.30-283.82-320.56
UFCF 452.21428.43566.60257.521,434.681,123.261,168.671,319.941,490.791,683.75
WACC
PV UFCF 1,047.721,016.771,071.141,128.431,188.78
SUM PV UFCF 5,452.84

Terminal Value

Growth in perpetuity method:
Long-term growth rate
WACC (%) 7.21
Free cash flow (t + 1) 1,717.43
Terminal Value 32,964.08
Present Value of Terminal Value 23,273.65

Intrinsic Value

Enterprise Value 28,726.49
Net Debt 1,174
Equity Value 27,552.49
Shares Outstanding 111.37
Equity Value Per Share 247.40