Discounted Cash Flow (DCF) Analysis Unlevered

Franchise Group, Inc. (FRG)

$25.47

-0.70 (-2.67%)

All numbers are in Millions, Currency in USD

Stock DCF: -208,254.63 | 25.47 | 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	174.87	132.55	2,152.50	3,255.20	4,397.83	21,836.27	108,422.19	538,341.61	2,672,992.37	13,272,034.14
Revenue (%)
EBITDA	19.12	12.66	131.39	536.13	365.62	2,243.44	11,139.19	55,308.69	274,620.62	1,363,555.78
EBITDA (%)
EBIT	7.66	-0.97	68.84	463.36	280.25	1,198.97	5,953.17	29,558.87	146,766.74	728,731.29
EBIT (%)
Depreciation	11.45	13.63	62.54	72.77	85.36	1,044.47	5,186.02	25,749.82	127,853.88	634,824.49
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	18.52	22.98	151.50	292.71	80.78	2,000.15	9,931.23	49,310.87	244,840.03	1,215,688.20
Total Cash (%)
Account Receivables	66.82	67.70	90.61	118.70	514.34	4,753.29	23,601.19	117,185.45	581,853.26	2,889,037.94
Account Receivables (%)
Inventories	-	-	302.31	673.17	736.84	3,747.02	18,604.84	92,377.42	458,675.55	2,277,431.69
Inventories (%)
Accounts Payable	32.43	30.95	450.91	681.91	921.27	4,574.34	22,712.65	112,773.63	559,947.53	2,780,270.84
Accounts Payable (%)
Capital Expenditure	-8.31	-3.17	-41.52	-46.96	3.40	-455.88	-2,263.53	-11,238.95	-55,804.01	-277,079.99
Capital Expenditure (%)

Weighted Average Cost Of Capital

Share price	$ 25.47
Beta	1.726
Diluted Shares Outstanding	39.31
Cost of Debt
Tax Rate	11.42
After-tax Cost of Debt	11.04%
Risk-Free Rate
Market Risk Premium
Cost of Equity	11.529
Total Debt	2,728.88
Total Equity	1,001.22
Total Capital	3,730.10
Debt Weighting	73.16
Equity Weighting	26.84
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	174.87	132.55	2,152.50	3,255.20	4,397.83	21,836.27	108,422.19	538,341.61	2,672,992.37	13,272,034.14
EBITDA	19.12	12.66	131.39	536.13	365.62	2,243.44	11,139.19	55,308.69	274,620.62	1,363,555.78
EBIT	7.66	-0.97	68.84	463.36	280.25	1,198.97	5,953.17	29,558.87	146,766.74	728,731.29
Tax Rate	96.99%	46.03%	181.33%	-129.62%	11.42%	41.23%	41.23%	41.23%	41.23%	41.23%
EBIAT	0.23	-0.52	-55.99	1,063.99	248.24	704.62	3,498.61	17,371.42	86,253.16	428,267.17
Depreciation	11.45	13.63	62.54	72.77	85.36	1,044.47	5,186.02	25,749.82	127,853.88	634,824.49
Accounts Receivable	-	-0.89	-22.91	-28.09	-395.64	-4,238.95	-18,847.90	-93,584.26	-464,667.81	-2,307,184.68
Inventories	-	-	-	-370.86	-63.67	-3,010.18	-14,857.82	-73,772.57	-366,298.13	-1,818,756.14
Accounts Payable	-	-1.47	419.96	231	239.36	3,653.06	18,138.31	90,060.98	447,173.90	2,220,323.31
Capital Expenditure	-8.31	-3.17	-41.52	-46.96	3.40	-455.88	-2,263.53	-11,238.95	-55,804.01	-277,079.99
UFCF	3.37	7.58	362.08	921.85	117.05	-2,302.86	-9,146.31	-45,413.57	-225,489.01	-1,119,605.84
WACC
PV UFCF						-2,071.47	-7,400.66	-33,053.91	-147,630.12	-659,366.88
SUM PV UFCF										-849,523.04

Terminal Value

Growth in perpetuity method:
Long-term growth rate
WACC (%)	11.17
Free cash flow (t + 1)	-1,141,997.96
Terminal Value	-12,453,630.98
Present Value of Terminal Value	-7,334,288.08

Intrinsic Value

Enterprise Value	-8,183,811.12
Net Debt	2,648.09
Equity Value	-8,186,459.21
Shares Outstanding	39.31
Equity Value Per Share	-208,254.63