Discounted Cash Flow (DCF) Analysis Unlevered

PayPal Holdings, Inc. (PYPL)

$73.88

+1.32 (+1.82%)
All numbers are in Millions, Currency in USD
Stock DCF: 92.69 | 73.88 | 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 15,45117,77221,45425,37127,51831,814.9236,782.8042,526.4149,166.8856,844.26
Revenue (%)
EBITDA 3,2294,0256,4635,5964,9877,244.298,375.499,683.3111,195.3612,943.51
EBITDA (%)
EBIT 2,4533,1135,2744,3313,6705,623.776,501.917,517.188,690.9910,048.08
EBIT (%)
Depreciation 7769121,1891,2651,3171,620.531,873.572,166.132,504.372,895.43
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 9,10910,76113,0839,50010,85116,375.9518,933.0421,889.4325,307.4529,259.19
Total Cash (%)
Account Receivables 22,90726,93436,76441,78744,75150,808.3658,742.0667,914.5978,519.4190,780.17
Account Receivables (%)
Inventories ----------
Inventories (%)
Accounts Payable 21,84324,75935,67039,03840,23347,532.8654,955.0963,536.2973,457.4484,927.78
Accounts Payable (%)
Capital Expenditure -823-704-866-908-706-1,238.80-1,432.24-1,655.88-1,914.44-2,213.38
Capital Expenditure (%)

Weighted Average Cost Of Capital

Share price $ 73.88
Beta 1.309
Diluted Shares Outstanding 1,158
Cost of Debt
Tax Rate 28.13
After-tax Cost of Debt 2.10%
Risk-Free Rate
Market Risk Premium
Cost of Equity 9.559
Total Debt 10,417
Total Equity 85,553.04
Total Capital 95,970.04
Debt Weighting 10.85
Equity Weighting 89.15
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 15,45117,77221,45425,37127,51831,814.9236,782.8042,526.4149,166.8856,844.26
EBITDA 3,2294,0256,4635,5964,9877,244.298,375.499,683.3111,195.3612,943.51
EBIT 2,4533,1135,2744,3313,6705,623.776,501.917,517.188,690.9910,048.08
Tax Rate 13.43%17.98%17.04%-1.71%28.13%14.97%14.97%14.97%14.97%14.97%
EBIAT 2,123.662,553.324,375.394,404.962,637.474,781.675,528.326,391.577,389.618,543.49
Depreciation 7769121,1891,2651,3171,620.531,873.572,166.132,504.372,895.43
Accounts Receivable --4,027-9,830-5,023-2,964-6,057.36-7,933.69-9,172.54-10,604.82-12,260.76
Inventories ----------
Accounts Payable -2,91610,9113,3681,1957,299.867,422.238,581.209,921.1511,470.33
Capital Expenditure -823-704-866-908-706-1,238.80-1,432.24-1,655.88-1,914.44-2,213.38
UFCF 2,076.661,650.325,779.393,106.961,479.476,405.895,458.196,310.487,295.868,435.11
WACC
PV UFCF 5,890.484,615.204,906.535,216.265,545.55
SUM PV UFCF 26,174.02

Terminal Value

Growth in perpetuity method:
Long-term growth rate
WACC (%) 8.75
Free cash flow (t + 1) 8,603.81
Terminal Value 127,463.83
Present Value of Terminal Value 83,799.35

Intrinsic Value

Enterprise Value 109,973.37
Net Debt 2,641
Equity Value 107,332.37
Shares Outstanding 1,158
Equity Value Per Share 92.69