Discounted Cash Flow (DCF) Analysis Unlevered

Select Medical Holdings Corporation (SEM)

$23.45

+0.85 (+3.76%)

All numbers are in Millions, Currency in USD

Stock DCF: 66.19 | 23.45 | 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	5,081.26	5,453.92	5,531.71	6,204.51	6,333.54	6,697.76	7,082.92	7,490.23	7,920.97	8,376.48
Revenue (%)
EBITDA	649.85	709.45	802.76	966.20	635.51	882.98	933.75	987.45	1,044.23	1,104.28
EBITDA (%)
EBIT	448.20	496.87	597.10	763.55	429.69	640.52	677.35	716.30	757.50	801.06
EBIT (%)
Depreciation	201.66	212.58	205.66	202.64	205.82	242.46	256.40	271.15	286.74	303.23
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	175.18	335.88	577.06	74.31	97.91	305.17	322.72	341.28	360.90	381.66
Total Cash (%)
Account Receivables	706.68	762.68	896.76	889.30	941.31	981.87	1,038.33	1,098.04	1,161.19	1,227.96
Account Receivables (%)
Inventories	-	-	5.69	6.38	6.51	6.88	7.28	7.70	8.14	8.61
Inventories (%)
Accounts Payable	146.69	145.73	177.09	233.84	186.73	207.33	219.25	231.86	245.19	259.29
Accounts Payable (%)
Capital Expenditure	-167.28	-157.13	-146.44	-180.54	-190.37	-197.40	-208.75	-220.75	-233.45	-246.87
Capital Expenditure (%)

Weighted Average Cost Of Capital

Share price	$ 23.45
Beta	1.436
Diluted Shares Outstanding	122.51
Cost of Debt
Tax Rate	38.98
After-tax Cost of Debt	2.54%
Risk-Free Rate
Market Risk Premium
Cost of Equity	10.934
Total Debt	5,124.74
Total Equity	2,872.88
Total Capital	7,997.62
Debt Weighting	64.08
Equity Weighting	35.92
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	5,081.26	5,453.92	5,531.71	6,204.51	6,333.54	6,697.76	7,082.92	7,490.23	7,920.97	8,376.48
EBITDA	649.85	709.45	802.76	966.20	635.51	882.98	933.75	987.45	1,044.23	1,104.28
EBIT	448.20	496.87	597.10	763.55	429.69	640.52	677.35	716.30	757.50	801.06
Tax Rate	41.48%	24.07%	43.26%	36.13%	38.98%	36.78%	36.78%	36.78%	36.78%	36.78%
EBIAT	262.28	377.29	338.78	487.71	262.18	404.91	428.19	452.82	478.85	506.39
Depreciation	201.66	212.58	205.66	202.64	205.82	242.46	256.40	271.15	286.74	303.23
Accounts Receivable	-	-56	-134.09	7.46	-52.01	-40.56	-56.46	-59.71	-63.14	-66.78
Inventories	-	-	-	-0.69	-0.13	-0.37	-0.40	-0.42	-0.44	-0.47
Accounts Payable	-	-0.96	31.36	56.76	-47.12	20.60	11.92	12.61	13.33	14.10
Capital Expenditure	-167.28	-157.13	-146.44	-180.54	-190.37	-197.40	-208.75	-220.75	-233.45	-246.87
UFCF	296.65	375.77	295.27	573.34	178.37	429.64	430.91	455.69	481.89	509.61
WACC
PV UFCF						407.05	386.78	387.52	388.26	388.99
SUM PV UFCF										1,958.60

Terminal Value

Growth in perpetuity method:
Long-term growth rate
WACC (%)	5.55
Free cash flow (t + 1)	519.80
Terminal Value	14,642.20
Present Value of Terminal Value	11,176.74

Intrinsic Value

Enterprise Value	13,135.34
Net Debt	5,026.83
Equity Value	8,108.50
Shares Outstanding	122.51
Equity Value Per Share	66.19