Discounted Cash Flow (DCF) Analysis Unlevered

Lumentum Holdings Inc. (LITE)

$51.4

+0.15 (+0.29%)

All numbers are in Millions, Currency in USD

Stock DCF: 103.77 | 51.4 | 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	1,247.70	1,565.30	1,678.60	1,742.80	1,712.60	1,861.53	2,023.41	2,199.37	2,390.64	2,598.53
Revenue (%)
EBITDA	224.80	160.50	427.40	706.90	482.40	455.93	495.58	538.68	585.52	636.44
EBITDA (%)
EBIT	147.60	3	235.50	529.80	315.30	278.71	302.95	329.29	357.93	389.06
EBIT (%)
Depreciation	77.20	157.50	191.90	177.10	167.10	177.22	192.63	209.38	227.59	247.38
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	711.50	768.50	1,553.80	1,946	2,549	1,709.57	1,858.24	2,019.83	2,195.48	2,386.41
Total Cash (%)
Account Receivables	197.10	286.20	233.50	212.80	262	281.09	305.54	332.11	360.99	392.38
Account Receivables (%)
Inventories	153.60	228.80	188.90	196.40	250.10	238.48	259.21	281.76	306.26	332.89
Inventories (%)
Accounts Payable	126.50	160.80	150.80	116.90	156.70	168.48	183.13	199.05	216.36	235.18
Accounts Payable (%)
Capital Expenditure	-93.20	-166	-86	-84.80	-91.20	-124.31	-135.12	-146.87	-159.64	-173.52
Capital Expenditure (%)

Weighted Average Cost Of Capital

Share price	$ 51.4
Beta	1.099
Diluted Shares Outstanding	74.20
Cost of Debt
Tax Rate	15.40
After-tax Cost of Debt	3.50%
Risk-Free Rate
Market Risk Premium
Cost of Equity	8.776
Total Debt	1,936
Total Equity	3,813.88
Total Capital	5,749.88
Debt Weighting	33.67
Equity Weighting	66.33
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	1,247.70	1,565.30	1,678.60	1,742.80	1,712.60	1,861.53	2,023.41	2,199.37	2,390.64	2,598.53
EBITDA	224.80	160.50	427.40	706.90	482.40	455.93	495.58	538.68	585.52	636.44
EBIT	147.60	3	235.50	529.80	315.30	278.71	302.95	329.29	357.93	389.06
Tax Rate	-91.73%	-9.31%	22.26%	14.21%	15.40%	-9.83%	-9.83%	-9.83%	-9.83%	-9.83%
EBIAT	283	3.28	183.08	454.52	266.75	306.12	332.74	361.68	393.13	427.32
Depreciation	77.20	157.50	191.90	177.10	167.10	177.22	192.63	209.38	227.59	247.38
Accounts Receivable	-	-89.10	52.70	20.70	-49.20	-19.09	-24.44	-26.57	-28.88	-31.39
Inventories	-	-75.20	39.90	-7.50	-53.70	11.62	-20.74	-22.54	-24.50	-26.63
Accounts Payable	-	34.30	-10	-33.90	39.80	11.78	14.65	15.93	17.31	18.82
Capital Expenditure	-93.20	-166	-86	-84.80	-91.20	-124.31	-135.12	-146.87	-159.64	-173.52
UFCF	267	-135.22	371.58	526.12	279.55	363.34	359.72	391.01	425.01	461.97
WACC
PV UFCF						339.57	314.20	319.18	324.24	329.38
SUM PV UFCF										1,626.56

Terminal Value

Growth in perpetuity method:
Long-term growth rate
WACC (%)	7.00
Free cash flow (t + 1)	471.21
Terminal Value	9,424.14
Present Value of Terminal Value	6,719.28

Intrinsic Value

Enterprise Value	8,345.84
Net Debt	645.80
Equity Value	7,700.04
Shares Outstanding	74.20
Equity Value Per Share	103.77