Discounted Cash Flow (DCF) Analysis Unlevered

Paychex, Inc. (PAYX)

$108.17

+0.29 (+0.27%)

All numbers are in Millions, Currency in USD

Stock DCF: 75.03 | 108.17 | overvalue

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	3,380.90	3,772.50	4,040.50	4,056.80	4,611.70	4,989.50	5,398.24	5,840.47	6,318.93	6,836.58
Revenue (%)
EBITDA	1,438	1,567.10	1,685.60	1,662	2,053	2,108.32	2,281.04	2,467.90	2,670.08	2,888.81
EBITDA (%)
EBIT	1,300	1,385.60	1,475.90	1,470	1,861.20	1,879.06	2,032.99	2,199.54	2,379.73	2,574.68
EBIT (%)
Depreciation	138	181.50	209.70	192	191.80	229.26	248.05	268.37	290.35	314.14
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	424.20	712.60	932.40	1,031.90	1,223.90	1,062.64	1,149.70	1,243.88	1,345.78	1,456.03
Total Cash (%)
Account Receivables	563.60	854.20	790.30	1,053.60	1,318.20	1,131.89	1,224.62	1,324.94	1,433.48	1,550.91
Account Receivables (%)
Inventories	-	-	-	-	-	-	-	-	-	-
Inventories (%)
Accounts Payable	74.50	75.90	79.40	89	105.70	106.44	115.16	124.59	134.80	145.84
Accounts Payable (%)
Capital Expenditure	-154	-123.80	-127	-114.60	-132.60	-166.45	-180.09	-194.84	-210.80	-228.07
Capital Expenditure (%)

Weighted Average Cost Of Capital

Share price	$ 108.17
Beta	0.968
Diluted Shares Outstanding	363.10
Cost of Debt
Tax Rate	23.67
After-tax Cost of Debt	3.17%
Risk-Free Rate
Market Risk Premium
Cost of Equity	8.379
Total Debt	881.20
Total Equity	39,276.53
Total Capital	40,157.73
Debt Weighting	2.19
Equity Weighting	97.81
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	3,380.90	3,772.50	4,040.50	4,056.80	4,611.70	4,989.50	5,398.24	5,840.47	6,318.93	6,836.58
EBITDA	1,438	1,567.10	1,685.60	1,662	2,053	2,108.32	2,281.04	2,467.90	2,670.08	2,888.81
EBIT	1,300	1,385.60	1,475.90	1,470	1,861.20	1,879.06	2,032.99	2,199.54	2,379.73	2,574.68
Tax Rate	27.96%	24.39%	23.59%	23.48%	23.67%	24.62%	24.62%	24.62%	24.62%	24.62%
EBIAT	936.51	1,047.71	1,127.75	1,124.90	1,420.74	1,416.52	1,532.56	1,658.11	1,793.94	1,940.91
Depreciation	138	181.50	209.70	192	191.80	229.26	248.05	268.37	290.35	314.14
Accounts Receivable	-	-290.60	63.90	-263.30	-264.60	186.31	-92.73	-100.32	-108.54	-117.43
Inventories	-	-	-	-	-	-	-	-	-	-
Accounts Payable	-	1.40	3.50	9.60	16.70	0.74	8.72	9.43	10.21	11.04
Capital Expenditure	-154	-123.80	-127	-114.60	-132.60	-166.45	-180.09	-194.84	-210.80	-228.07
UFCF	920.51	816.21	1,277.85	948.60	1,232.04	1,666.38	1,516.51	1,640.75	1,775.16	1,920.58
WACC
PV UFCF						1,539.24	1,293.93	1,293.12	1,292.31	1,291.50
SUM PV UFCF										6,710.09

Terminal Value

Growth in perpetuity method:
Long-term growth rate
WACC (%)	8.26
Free cash flow (t + 1)	1,959
Terminal Value	31,293.87
Present Value of Terminal Value	21,043.56

Intrinsic Value

Enterprise Value	27,753.65
Net Debt	511.20
Equity Value	27,242.45
Shares Outstanding	363.10
Equity Value Per Share	75.03