Discounted Cash Flow (DCF) Analysis Unlevered

Microsoft Corporation (MSFT)

$ 288.49
-7.88 (-2.66%)
All numbers are in Millions, Currency in USD
Stock DCF: 274.61 | 288.49 | overvalue

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 89,950110,360125,843143,015168,088196,619.77229,994.61269,034.60314,701.36368,119.73
Revenue (%)
EBITDA 34,14949,46858,05668,42385,13489,428.18104,608122,364.48143,135167,431.17
EBITDA (%)
EBIT 25,37139,20746,37455,62773,44872,031.6184,258.4898,560.77115,290.77134,860.58
EBIT (%)
Depreciation 8,77810,26111,68212,79611,68617,396.5720,349.5223,803.7127,844.2332,570.59
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 132,981133,768133,819136,527130,334215,648.63252,253.49295,071.77345,158.15403,746.36
Total Cash (%)
Account Receivables 19,79226,48129,52432,01138,04345,016.1752,657.3561,595.5772,050.9984,281.14
Account Receivables (%)
Inventories 2,1812,6622,0631,8952,6363,684.414,309.825,041.385,897.126,898.11
Inventories (%)
Accounts Payable 7,3908,6179,38212,53015,16316,225.5618,979.7422,201.4225,969.9630,378.18
Accounts Payable (%)
Capital Expenditure -8,129-11,632-13,925-15,441-20,622-21,120.11-24,705.11-28,898.63-33,803.97-39,541.96
Capital Expenditure (%)

Weighted Average Cost Of Capital

Share price $ 288.49
Beta 0.862
Diluted Shares Outstanding 7,608
Cost of Debt
Tax Rate 13.83
After-tax Cost of Debt 2.98%
Risk-Free Rate
Market Risk Premium
Cost of Equity 5.852
Total Debt 67,775
Total Equity 2,194,831.92
Total Capital 2,262,606.92
Debt Weighting 3.00
Equity Weighting 97.00
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 89,950110,360125,843143,015168,088196,619.77229,994.61269,034.60314,701.36368,119.73
EBITDA 34,14949,46858,05668,42385,13489,428.18104,608122,364.48143,135167,431.17
EBIT 25,37139,20746,37455,62773,44872,031.6184,258.4898,560.77115,290.77134,860.58
Tax Rate 8.40%54.57%10.18%16.51%13.83%20.70%20.70%20.70%20.70%20.70%
EBIAT 23,239.3117,812.6741,652.5346,444.2963,292.6357,123.1966,819.4578,161.5991,428.98106,948.41
Depreciation 8,77810,26111,68212,79611,68617,396.5720,349.5223,803.7127,844.2332,570.59
Accounts Receivable --6,689-3,043-2,487-6,032-6,973.16-7,641.18-8,938.22-10,455.42-12,230.15
Inventories --481599168-741-1,048.41-625.40-731.56-855.74-1,001
Accounts Payable -1,2277653,1482,6331,062.562,754.183,221.683,768.544,408.22
Capital Expenditure -8,129-11,632-13,925-15,441-20,622-21,120.11-24,705.11-28,898.63-33,803.97-39,541.96
UFCF 23,888.3110,498.6737,730.5344,628.2950,216.6346,440.6356,951.4666,618.5777,926.6191,154.11
WACC
PV UFCF 43,907.1950,907.2756,299.9262,263.8268,859.48
SUM PV UFCF 282,237.69

Terminal Value

Growth in perpetuity method:
Long-term growth rate
WACC (%) 5.77
Free cash flow (t + 1) 92,977.20
Terminal Value 2,466,238.63
Present Value of Terminal Value 1,863,041.69

Intrinsic Value

Enterprise Value 2,145,279.38
Net Debt 56,027
Equity Value 2,089,252.38
Shares Outstanding 7,608
Equity Value Per Share 274.61