Discounted Cash Flow (DCF) Analysis Unlevered

H&R Block, Inc. (HRB)

$45.55

-1.03 (-2.21%)

All numbers are in Millions, Currency in USD

Stock DCF: 122.44 | 45.55 | 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	3,094.88	2,639.72	3,413.99	3,463.27	3,472.18	3,613.90	3,761.39	3,914.91	4,074.69	4,241
Revenue (%)
EBITDA	798.91	368.26	932.46	889.53	914.69	860.87	896	932.57	970.63	1,010.25
EBITDA (%)
EBIT	632.21	198.72	775.61	747.35	784.19	685.47	713.45	742.57	772.88	804.42
EBIT (%)
Depreciation	166.69	169.54	156.85	142.18	130.50	175.40	182.55	190	197.76	205.83
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	1,572.15	2,661.91	934.25	885.01	986.98	1,683.96	1,752.69	1,824.22	1,898.68	1,976.17
Total Cash (%)
Account Receivables	138.96	133.20	531.24	261.28	95.90	255.89	266.33	277.20	288.51	300.29
Account Receivables (%)
Inventories	281.96	291.33	233.66	311.60	312.40	325.15	338.42	352.23	366.61	381.57
Inventories (%)
Accounts Payable	249.52	203.10	198.08	160.93	159.90	222.69	231.78	241.24	251.09	261.34
Accounts Payable (%)
Capital Expenditure	-95.49	-81.69	-52.79	-61.95	-69.70	-83.28	-86.68	-90.22	-93.90	-97.73
Capital Expenditure (%)

Weighted Average Cost Of Capital

Share price	$ 45.55
Beta	0.645
Diluted Shares Outstanding	153.51
Cost of Debt
Tax Rate	22.15
After-tax Cost of Debt	3.37%
Risk-Free Rate
Market Risk Premium
Cost of Equity	7.377
Total Debt	1,934.91
Total Equity	6,992.47
Total Capital	8,927.38
Debt Weighting	21.67
Equity Weighting	78.33
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	3,094.88	2,639.72	3,413.99	3,463.27	3,472.18	3,613.90	3,761.39	3,914.91	4,074.69	4,241
EBITDA	798.91	368.26	932.46	889.53	914.69	860.87	896	932.57	970.63	1,010.25
EBIT	632.21	198.72	775.61	747.35	784.19	685.47	713.45	742.57	772.88	804.42
Tax Rate	22.50%	-123.06%	12.70%	15.99%	22.15%	-9.94%	-9.94%	-9.94%	-9.94%	-9.94%
EBIAT	489.98	443.26	677.09	627.84	610.52	753.64	784.39	816.41	849.73	884.41
Depreciation	166.69	169.54	156.85	142.18	130.50	175.40	182.55	190	197.76	205.83
Accounts Receivable	-	5.77	-398.05	269.96	165.39	-159.99	-10.44	-10.87	-11.31	-11.78
Inventories	-	-9.37	57.67	-77.93	-0.80	-12.75	-13.27	-13.81	-14.38	-14.96
Accounts Payable	-	-46.42	-5.02	-37.15	-1.03	62.79	9.09	9.46	9.85	10.25
Capital Expenditure	-95.49	-81.69	-52.79	-61.95	-69.70	-83.28	-86.68	-90.22	-93.90	-97.73
UFCF	561.18	481.09	435.75	862.93	834.88	735.80	865.64	900.97	937.74	976.02
WACC
PV UFCF						690.83	763.06	745.66	728.66	712.04
SUM PV UFCF										3,640.25

Terminal Value

Growth in perpetuity method:
Long-term growth rate
WACC (%)	6.51
Free cash flow (t + 1)	995.54
Terminal Value	22,074.01
Present Value of Terminal Value	16,103.84

Intrinsic Value

Enterprise Value	19,744.08
Net Debt	947.93
Equity Value	18,796.15
Shares Outstanding	153.51
Equity Value Per Share	122.44