Discounted Cash Flow (DCF) Analysis Unlevered

Sprouts Farmers Market, Inc. (SFM)

$33.705

+0.42 (+1.28%)

All numbers are in Millions, Currency in USD

Stock DCF: 112.69 | 33.705 | undervalue

Operating Data

Year A/P	2018 Actual	2019 Actual	2020 Projected	2021 Projected	2022 Projected	2023 Projected	2024 Projected	2025 Projected	2026 Projected	2027 Projected	2028 Projected
Revenue	5,207.34	5,634.84	6,097.43	6,598	7,139.67	7,725.80	8,360.06	9,046.38	9,789.05	10,592.68	11,462.30
Revenue (%)
EBITDA	333.98	421.44	423.55	458.33	495.95	536.67	580.73	628.40	679.99	735.81	796.22
EBITDA (%)
EBIT	223.23	216.80	247.99	268.35	290.38	314.22	340.02	367.93	398.13	430.82	466.19
EBIT (%)
Depreciation	110.75	204.65	175.56	189.98	205.57	222.45	240.71	260.47	281.86	304.99	330.03
Depreciation (%)

Balance Sheet Data

Year A/P	2018 Actual	2019 Actual	2020 Projected	2021 Actual	2022 Actual	2023 Actual	2024 Projected	2025 Projected	2026 Projected	2027 Projected	2028 Projected
Total Cash	1.59	85.31	47.09	50.95	55.14	59.66	64.56	69.86	75.60	81.80	88.52
Total Cash (%)
Account Receivables	40.98	15.71	32.49	35.16	38.05	41.17	44.55	48.21	52.16	56.45	61.08
Account Receivables (%)
Inventories	264.37	275.98	304.09	329.06	356.07	385.31	416.94	451.17	488.21	528.29	571.66
Inventories (%)
Accounts Payable	120.26	122.84	136.87	148.11	160.27	173.43	187.66	203.07	219.74	237.78	257.30
Accounts Payable (%)
Capital Expenditure	-177.08	-183.23	-202.81	-219.46	-237.48	-256.98	-278.07	-300.90	-325.60	-352.33	-381.26
Capital Expenditure (%)

Weighted Average Cost Of Capital

Share price	$ 33.705
Beta	0.387
Diluted Shares Outstanding	109.14
Cost of Debt
Tax Rate	25.23
After-tax Cost of Debt	0.44%
Risk-Free Rate
Market Risk Premium
Cost of Equity	5.322
Total Debt	1,540.67
Total Equity	3,678.53
Total Capital	5,219.20
Debt Weighting	29.52
Equity Weighting	70.48
Wacc

Build Up Free Cash

Year A/P	2018 Actual	2019 Actual	2020 Projected	2021 Projected	2022 Projected	2023 Projected	2024 Projected	2025 Projected	2026 Projected	2027 Projected	2028 Projected
Revenue	5,207.34	5,634.84	6,097.43	6,598	7,139.67	7,725.80	8,360.06	9,046.38	9,789.05	10,592.68	11,462.30
EBITDA	333.98	421.44	423.55	458.33	495.95	536.67	580.73	628.40	679.99	735.81	796.22
EBIT	223.23	216.80	247.99	268.35	290.38	314.22	340.02	367.93	398.13	430.82	466.19
Tax Rate	19.03%	23.72%	23.20%	23.73%	24.27%	25.23%	23.20%	23.20%	23.20%	23.20%	23.20%
EBIAT	180.75	165.36	190.46	204.67	219.91	234.93	261.14	282.58	305.78	330.88	358.05
Depreciation	110.75	204.65	175.56	189.98	205.57	222.45	240.71	260.47	281.86	304.99	330.03
Accounts Receivable	-	25.26	-16.78	-2.67	-2.89	-3.12	-3.38	-3.66	-3.96	-4.28	-4.63
Inventories	-	-11.61	-28.12	-24.96	-27.01	-29.23	-31.63	-34.23	-37.04	-40.08	-43.37
Accounts Payable	-	2.57	14.03	11.24	12.16	13.16	14.24	15.41	16.67	18.04	19.52
Capital Expenditure	-177.08	-183.23	-202.81	-121.97	-102.38	-124.01	-278.07	-300.90	-325.60	-352.33	-381.26
UFCF	114.42	203	132.35	158.79	170.26	181.20	203.01	219.67	237.71	257.22	278.34
WACC
PV UFCF			142.82	164.95	170.26	174.43	188.12	195.96	204.13	212.64	221.50
SUM PV UFCF											1,062.03

Terminal Value

Growth in perpetuity method:
Long-term growth rate
WACC (%)	3.88
Free cash flow (t + 1)	283.90
Terminal Value	15,101.24
Present Value of Terminal Value	12,483.97

Intrinsic Value

Enterprise Value	13,546
Net Debt	1,247.44
Equity Value	12,298.57
Shares Outstanding	109.14
Equity Value Per Share	112.69