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	15,451	17,772	21,454	25,371	27,518	31,814.92	36,782.80	42,526.41	49,166.88	56,844.26
Revenue (%)
EBITDA	3,229	4,025	6,463	5,596	4,987	7,244.29	8,375.49	9,683.31	11,195.36	12,943.51
EBITDA (%)
EBIT	2,453	3,113	5,274	4,331	3,670	5,623.77	6,501.91	7,517.18	8,690.99	10,048.08
EBIT (%)
Depreciation	776	912	1,189	1,265	1,317	1,620.53	1,873.57	2,166.13	2,504.37	2,895.43
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	9,109	10,761	13,083	9,500	10,851	16,375.95	18,933.04	21,889.43	25,307.45	29,259.19
Total Cash (%)
Account Receivables	22,907	26,934	36,764	41,787	44,751	50,808.36	58,742.06	67,914.59	78,519.41	90,780.17
Account Receivables (%)
Inventories	-	-	-	-	-	-	-	-	-	-
Inventories (%)
Accounts Payable	21,843	24,759	35,670	39,038	40,233	47,532.86	54,955.09	63,536.29	73,457.44	84,927.78
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	15,451	17,772	21,454	25,371	27,518	31,814.92	36,782.80	42,526.41	49,166.88	56,844.26
EBITDA	3,229	4,025	6,463	5,596	4,987	7,244.29	8,375.49	9,683.31	11,195.36	12,943.51
EBIT	2,453	3,113	5,274	4,331	3,670	5,623.77	6,501.91	7,517.18	8,690.99	10,048.08
Tax Rate	13.43%	17.98%	17.04%	-1.71%	28.13%	14.97%	14.97%	14.97%	14.97%	14.97%
EBIAT	2,123.66	2,553.32	4,375.39	4,404.96	2,637.47	4,781.67	5,528.32	6,391.57	7,389.61	8,543.49
Depreciation	776	912	1,189	1,265	1,317	1,620.53	1,873.57	2,166.13	2,504.37	2,895.43
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	-	2,916	10,911	3,368	1,195	7,299.86	7,422.23	8,581.20	9,921.15	11,470.33
Capital Expenditure	-823	-704	-866	-908	-706	-1,238.80	-1,432.24	-1,655.88	-1,914.44	-2,213.38
UFCF	2,076.66	1,650.32	5,779.39	3,106.96	1,479.47	6,405.89	5,458.19	6,310.48	7,295.86	8,435.11
WACC
PV UFCF						5,890.48	4,615.20	4,906.53	5,216.26	5,545.55
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