Discounted Cash Flow (DCF) Analysis Unlevered

Microsoft Corporation (MSFT)

$414.92

-0.58 (-0.14%)
All numbers are in Millions, Currency in USD
Stock DCF: 284.04 | 414.92 | overvalue

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 125,843143,015168,088198,270211,915241,591.26275,423.34313,993.21357,964.35408,093.14
Revenue (%)
EBITDA 54,55965,25980,81697,983102,023113,367.96129,243.84147,342.95167,976.63191,499.83
EBITDA (%)
EBIT 42,87752,46369,13083,52388,16294,515.85107,751.71122,841.09140,043.58159,655.07
EBIT (%)
Depreciation 11,68212,79611,68614,46013,86118,852.1121,492.1324,501.8527,933.0631,844.76
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 133,819136,527130,334104,757111,262185,870.30211,899.30241,573.36275,402.93313,969.94
Total Cash (%)
Account Receivables 29,52432,01138,04344,26148,68854,974.3762,672.9071,449.5281,455.2092,862.07
Account Receivables (%)
Inventories 2,0631,8952,6363,7422,5003,672.024,186.244,772.485,440.816,202.73
Inventories (%)
Accounts Payable 9,38212,53015,16319,00018,09520,950.4123,884.2727,228.9931,042.1035,389.19
Accounts Payable (%)
Capital Expenditure -13,925-15,441-20,622-23,886-28,107-28,720.98-32,743.02-37,328.31-42,555.71-48,515.14
Capital Expenditure (%)

Weighted Average Cost Of Capital

Share price $ 414.92
Beta 0.890
Diluted Shares Outstanding 7,472
Cost of Debt
Tax Rate 18.98
After-tax Cost of Debt 3.41%
Risk-Free Rate
Market Risk Premium
Cost of Equity 8.411
Total Debt 59,965
Total Equity 3,100,282.24
Total Capital 3,160,247.24
Debt Weighting 1.90
Equity Weighting 98.10
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 125,843143,015168,088198,270211,915241,591.26275,423.34313,993.21357,964.35408,093.14
EBITDA 54,55965,25980,81697,983102,023113,367.96129,243.84147,342.95167,976.63191,499.83
EBIT 42,87752,46369,13083,52388,16294,515.85107,751.71122,841.09140,043.58159,655.07
Tax Rate 10.18%16.51%13.83%13.11%18.98%14.52%14.52%14.52%14.52%14.52%
EBIAT 38,511.5743,802.5959,571.6672,570.3171,430.0680,790.7292,104.53105,002.71119,707.13136,470.74
Depreciation 11,68212,79611,68614,46013,86118,852.1121,492.1324,501.8527,933.0631,844.76
Accounts Receivable --2,487-6,032-6,218-4,427-6,286.37-7,698.53-8,776.62-10,005.68-11,406.86
Inventories -168-741-1,1061,242-1,172.02-514.22-586.24-668.33-761.92
Accounts Payable -3,1482,6333,837-9052,855.412,933.863,344.723,813.114,347.09
Capital Expenditure -13,925-15,441-20,622-23,886-28,107-28,720.98-32,743.02-37,328.31-42,555.71-48,515.14
UFCF 36,268.5741,986.5946,495.6659,657.3153,094.0666,318.8675,574.7586,158.1298,223.57111,978.66
WACC
PV UFCF 61,224.9564,410.9067,790.7271,347.8975,091.71
SUM PV UFCF 339,866.17

Terminal Value

Growth in perpetuity method:
Long-term growth rate
WACC (%) 8.32
Free cash flow (t + 1) 116,457.80
Terminal Value 2,695,782.46
Present Value of Terminal Value 1,807,763.39

Intrinsic Value

Enterprise Value 2,147,629.56
Net Debt 25,261
Equity Value 2,122,368.56
Shares Outstanding 7,472
Equity Value Per Share 284.04