Discounted Cash Flow (DCF) Analysis Unlevered
Mercury General Corporation (MCY)
$33.22
+0.29 (+0.88%)
All numbers are in Millions, Currency in USD
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 | 3,415.96 | 3,380 | 3,972.52 | 3,784.51 | 3,993.36 | 4,165.70 | 4,345.48 | 4,533.02 | 4,728.66 | 4,932.74 |
|---|---|---|---|---|---|---|---|---|---|---|
| Revenue (%) | ||||||||||
| EBITDA | 237.60 | 45.21 | 459.83 | 544.01 | 395.48 | 367.80 | 383.68 | 400.23 | 417.51 | 435.53 |
| EBITDA (%) | ||||||||||
| EBIT | 182.25 | -13.58 | 395.10 | 475.55 | 316.42 | 294.67 | 307.39 | 320.66 | 334.49 | 348.93 |
| EBIT (%) | ||||||||||
| Depreciation | 55.34 | 58.79 | 64.73 | 68.46 | 79.06 | 73.13 | 76.29 | 79.58 | 83.01 | 86.60 |
| 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 | 594.12 | 567.59 | 788.53 | 724.09 | 475.68 | 708.83 | 739.42 | 771.34 | 804.63 | 839.35 |
|---|---|---|---|---|---|---|---|---|---|---|
| Total Cash (%) | ||||||||||
| Account Receivables | 598.32 | 821.14 | 697.75 | 648.29 | 688.45 | 781.02 | 814.73 | 849.89 | 886.57 | 924.83 |
| Account Receivables (%) | ||||||||||
| Inventories | - | - | - | - | - | - | - | - | - | - |
| Inventories (%) | ||||||||||
| Accounts Payable | 108.25 | 115.07 | 143.32 | 194.42 | 169.13 | 162.91 | 169.94 | 177.27 | 184.93 | 192.91 |
| Accounts Payable (%) | ||||||||||
| Capital Expenditure | -19.44 | -27.96 | -40.09 | -39.95 | -41.44 | -37.48 | -39.10 | -40.79 | -42.55 | -44.38 |
| Capital Expenditure (%) |
Weighted Average Cost Of Capital
| Share price | $ 33.22 |
|---|---|
| Beta | 0.416 |
| Diluted Shares Outstanding | 55.36 |
| Cost of Debt | |
| Tax Rate | 17.16 |
| After-tax Cost of Debt | 3.48% |
| Risk-Free Rate | |
| Market Risk Premium | |
| Cost of Equity | 4.813 |
| Total Debt | 407.51 |
| Total Equity | 1,838.99 |
| Total Capital | 2,246.50 |
| Debt Weighting | 18.14 |
| Equity Weighting | 81.86 |
| 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 | 3,415.96 | 3,380 | 3,972.52 | 3,784.51 | 3,993.36 | 4,165.70 | 4,345.48 | 4,533.02 | 4,728.66 | 4,932.74 |
|---|---|---|---|---|---|---|---|---|---|---|
| EBITDA | 237.60 | 45.21 | 459.83 | 544.01 | 395.48 | 367.80 | 383.68 | 400.23 | 417.51 | 435.53 |
| EBIT | 182.25 | -13.58 | 395.10 | 475.55 | 316.42 | 294.67 | 307.39 | 320.66 | 334.49 | 348.93 |
| Tax Rate | 13.29% | 81.29% | 15.34% | 18.30% | 17.16% | 29.08% | 29.08% | 29.08% | 29.08% | 29.08% |
| EBIAT | 158.03 | -2.54 | 334.51 | 388.54 | 262.11 | 208.99 | 218.01 | 227.42 | 237.24 | 247.48 |
| Depreciation | 55.34 | 58.79 | 64.73 | 68.46 | 79.06 | 73.13 | 76.29 | 79.58 | 83.01 | 86.60 |
| Accounts Receivable | - | -222.82 | 123.39 | 49.46 | -40.16 | -92.57 | -33.71 | -35.16 | -36.68 | -38.26 |
| Inventories | - | - | - | - | - | - | - | - | - | - |
| Accounts Payable | - | 6.82 | 28.25 | 51.10 | -25.30 | -6.22 | 7.03 | 7.33 | 7.65 | 7.98 |
| Capital Expenditure | -19.44 | -27.96 | -40.09 | -39.95 | -41.44 | -37.48 | -39.10 | -40.79 | -42.55 | -44.38 |
| UFCF | 193.93 | -187.71 | 510.79 | 517.61 | 234.27 | 145.86 | 228.52 | 238.39 | 248.67 | 259.41 |
| WACC | ||||||||||
| PV UFCF | 139.48 | 208.99 | 208.48 | 207.97 | 207.47 | |||||
| SUM PV UFCF | 972.38 |
Terminal Value
| Growth in perpetuity method: | |
|---|---|
| Long-term growth rate | |
| WACC (%) | 4.57 |
| Free cash flow (t + 1) | 264.59 |
| Terminal Value | 10,295.52 |
| Present Value of Terminal Value | 8,234.03 |
Intrinsic Value
| Enterprise Value | 9,206.41 |
|---|---|
| Net Debt | 71.95 |
| Equity Value | 9,134.46 |
| Shares Outstanding | 55.36 |
| Equity Value Per Share | 165.01 |