Discounted Cash Flow (DCF) Analysis Unlevered

Rent-A-Center, Inc. (RCII)

$20.5034

+0.41 (+2.06%)
All numbers are in Millions, Currency in USD
Stock DCF: 679.71 | 20.5034 | undervalue

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 2,702.542,660.462,669.852,814.194,583.455,3526,249.417,297.318,520.919,949.68
Revenue (%)
EBITDA 632.78742.39935.48928.471,651.751,663.261,942.162,267.812,648.083,092.10
EBITDA (%)
EBIT -64.2056.81254.81238.10265.18252.08294.35343.70401.34468.63
EBIT (%)
Depreciation 696.98685.59680.67690.361,386.571,411.181,647.811,924.112,246.742,623.47
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 72.97155.3970.49159.45108.33205.63240.11280.37327.38382.28
Total Cash (%)
Account Receivables 69.8269.6484.1290126.38153.15178.83208.82243.83284.71
Account Receivables (%)
Inventories 868.99855.46858.48904.891,473.791,720.912,009.472,346.422,739.863,199.28
Inventories (%)
Accounts Payable 90.35113.84168.12186.06135.67251.44293.60342.84400.32467.45
Accounts Payable (%)
Capital Expenditure -65.46-27.96-21.16-34.55-62.45-73.38-85.69-100.06-116.83-136.42
Capital Expenditure (%)

Weighted Average Cost Of Capital

Share price $ 20.5,034
Beta 1.621
Diluted Shares Outstanding 66.84
Cost of Debt
Tax Rate 30.55
After-tax Cost of Debt 2.63%
Risk-Free Rate
Market Risk Premium
Cost of Equity 11.453
Total Debt 1,867.73
Total Equity 1,370.43
Total Capital 3,238.16
Debt Weighting 57.68
Equity Weighting 42.32
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 2,702.542,660.462,669.852,814.194,583.455,3526,249.417,297.318,520.919,949.68
EBITDA 632.78742.39935.48928.471,651.751,663.261,942.162,267.812,648.083,092.10
EBIT -64.2056.81254.81238.10265.18252.08294.35343.70401.34468.63
Tax Rate 106.04%38.65%22.45%6.58%30.55%40.85%40.85%40.85%40.85%40.85%
EBIAT 3.8834.85197.61222.43184.16149.10174.10203.29237.38277.18
Depreciation 696.98685.59680.67690.361,386.571,411.181,647.811,924.112,246.742,623.47
Accounts Receivable -0.18-14.48-5.88-36.37-26.77-25.68-29.99-35.01-40.88
Inventories -13.53-3.02-46.41-568.90-247.12-288.56-336.95-393.44-459.42
Accounts Payable -23.4954.2817.94-50.40115.7842.1649.2357.4967.13
Capital Expenditure -65.46-27.96-21.16-34.55-62.45-73.38-85.69-100.06-116.83-136.42
UFCF 635.40729.67893.91843.90852.611,328.781,464.141,709.641,996.312,331.05
WACC
PV UFCF 1,249.211,294.031,420.521,559.381,711.81
SUM PV UFCF 7,234.95

Terminal Value

Growth in perpetuity method:
Long-term growth rate
WACC (%) 6.37
Free cash flow (t + 1) 2,377.67
Terminal Value 54,409.03
Present Value of Terminal Value 39,955.37

Intrinsic Value

Enterprise Value 47,190.32
Net Debt 1,759.40
Equity Value 45,430.92
Shares Outstanding 66.84
Equity Value Per Share 679.71