Discounted Cash Flow (DCF) Analysis Unlevered

Select Medical Holdings Corporation (SEM)

$30.34

+0.08 (+0.26%)

All numbers are in Millions, Currency in USD

Stock DCF: 37.22 | 30.34 | undervalue

Operating Data

Year A/P	2016 Actual	2017 Actual	2018 Actual	2019 Projected	2020 Projected	2021 Projected	2022 Projected	2023 Projected	2024 Projected	2025 Projected	2026 Projected
Revenue	4,286.02	4,443.60	5,081.26	5,539.25	6,038.52	6,582.79	7,176.11	7,822.92	8,528.02	9,296.68	10,134.61
Revenue (%)
EBITDA	486.27	473.71	596.60	623.11	679.28	740.50	807.24	880	959.32	1,045.79	1,140.05
EBITDA (%)
EBIT	340.96	313.70	394.94	420.75	458.67	500.01	545.08	594.21	647.77	706.15	769.80
EBIT (%)
Depreciation	145.31	160.01	201.66	202.36	220.60	240.49	262.16	285.79	311.55	339.63	370.25
Depreciation (%)

Balance Sheet Data

Year A/P	2016 Actual	2017 Actual	2018 Actual	2019 Projected	2020 Actual	2021 Actual	2022 Projected	2023 Projected	2024 Projected	2025 Projected	2026 Projected
Total Cash	99.03	122.55	175.18	157.24	171.41	186.86	203.70	222.06	242.08	263.90	287.69
Total Cash (%)
Account Receivables	573.75	691.73	706.68	791.39	862.72	940.48	1,025.25	1,117.66	1,218.40	1,328.22	1,447.93
Account Receivables (%)
Inventories	-	-	-	-	-	-	-	-	-	-	-
Inventories (%)
Accounts Payable	126.56	128.19	146.69	161.09	175.61	191.44	208.70	227.51	248.01	270.37	294.74
Accounts Payable (%)
Capital Expenditure	-161.63	-233.24	-167.28	-227.34	-247.83	-270.16	-294.51	-321.06	-350	-381.54	-415.93
Capital Expenditure (%)

Weighted Average Cost Of Capital

Share price	$ 30.34
Beta	1.349
Diluted Shares Outstanding	130.59
Cost of Debt
Tax Rate	36.13
After-tax Cost of Debt	1.83%
Risk-Free Rate
Market Risk Premium
Cost of Equity	9.900
Total Debt	4,762.18
Total Equity	3,962.22
Total Capital	8,724.41
Debt Weighting	54.58
Equity Weighting	45.42
Wacc

Build Up Free Cash

Year A/P	2016 Actual	2017 Actual	2018 Actual	2019 Projected	2020 Projected	2021 Projected	2022 Projected	2023 Projected	2024 Projected	2025 Projected	2026 Projected
Revenue	4,286.02	4,443.60	5,081.26	5,539.25	6,038.52	6,582.79	7,176.11	7,822.92	8,528.02	9,296.68	10,134.61
EBITDA	486.27	473.71	596.60	623.11	679.28	740.50	807.24	880	959.32	1,045.79	1,140.05
EBIT	340.96	313.70	394.94	420.75	458.67	500.01	545.08	594.21	647.77	706.15	769.80
Tax Rate	36.14%	12.48%	41.48%	33.90%	43.26%	36.13%	33.90%	33.90%	33.90%	33.90%	33.90%
EBIAT	217.72	274.54	231.11	278.12	260.24	319.38	360.30	392.77	428.18	466.77	508.84
Depreciation	145.31	160.01	201.66	202.36	220.60	240.49	262.16	285.79	311.55	339.63	370.25
Accounts Receivable	-	-117.98	-14.94	-84.72	-71.33	-77.76	-84.77	-92.41	-100.74	-109.82	-119.72
Inventories	-	-	-	-	-	-	-	-	-	-	-
Accounts Payable	-	1.64	18.50	14.40	14.52	15.83	17.26	18.81	20.51	22.35	24.37
Capital Expenditure	-161.63	-233.24	-167.28	-227.34	-146.44	-180.54	-294.51	-321.06	-350	-381.54	-415.93
UFCF	201.40	84.96	269.04	182.83	176.21	227.77	260.44	283.91	309.50	337.40	367.81
WACC
PV UFCF				192.87	176.21	215.92	234.03	241.85	249.93	258.28	266.90
SUM PV UFCF											1,319.67

Terminal Value

Growth in perpetuity method:
Long-term growth rate
WACC (%)	5.49
Free cash flow (t + 1)	375.16
Terminal Value	10,749.68
Present Value of Terminal Value	8,228.85

Intrinsic Value

Enterprise Value	9,548.53
Net Debt	4,687.87
Equity Value	4,860.65
Shares Outstanding	130.59
Equity Value Per Share	37.22