Discounted Cash Flow (DCF) Analysis Unlevered

Block, Inc. (SQ)

$72.65

-4.81 (-6.21%)

All numbers are in Millions, Currency in USD

Stock DCF: -89.01 | 72.65 | overvalue

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	3,298.18	4,713.50	9,497.58	17,661.20	17,531.59	27,596.06	43,438.30	68,375.20	107,627.79	169,414.37
Revenue (%)
EBITDA	24.83	453.81	357.12	332.80	-744.17	650.20	1,023.46	1,611	2,535.84	3,991.61
EBITDA (%)
EBIT	-36.13	378.21	272.91	198.04	-492.21	447.94	705.09	1,109.86	1,747	2,749.92
EBIT (%)
Depreciation	60.96	75.60	84.21	134.76	-251.97	202.26	318.37	501.14	788.84	1,241.69
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	1,458.18	2,215.87	5,891	8,143.95	8,806.38	13,775.55	21,683.77	34,131.90	53,726.22	84,569.18
Total Cash (%)
Account Receivables	433.44	689.84	1,215.46	2,099.62	4,287.48	4,245.31	6,682.44	10,518.68	16,557.20	26,062.30
Account Receivables (%)
Inventories	28.63	47.68	61.13	77.06	129.71	204.18	321.39	505.90	796.32	1,253.47
Inventories (%)
Accounts Payable	90.55	137.95	286.45	336.78	464.38	730.96	1,150.59	1,811.12	2,850.85	4,487.45
Accounts Payable (%)
Capital Expenditure	-62.79	-62.50	-138.40	-134.32	-170.81	-354.43	-557.90	-878.17	-1,382.31	-2,175.86
Capital Expenditure (%)

Weighted Average Cost Of Capital

Share price	$ 72.65
Beta	2.350
Diluted Shares Outstanding	501.78
Cost of Debt
Tax Rate	4.35
After-tax Cost of Debt	0.57%
Risk-Free Rate
Market Risk Premium
Cost of Equity	14.594
Total Debt	6,009.45
Total Equity	36,454.24
Total Capital	42,463.70
Debt Weighting	14.15
Equity Weighting	85.85
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	3,298.18	4,713.50	9,497.58	17,661.20	17,531.59	27,596.06	43,438.30	68,375.20	107,627.79	169,414.37
EBITDA	24.83	453.81	357.12	332.80	-744.17	650.20	1,023.46	1,611	2,535.84	3,991.61
EBIT	-36.13	378.21	272.91	198.04	-492.21	447.94	705.09	1,109.86	1,747	2,749.92
Tax Rate	-6.44%	0.73%	1.33%	-5.60%	4.35%	-1.13%	-1.13%	-1.13%	-1.13%	-1.13%
EBIAT	-38.45	375.45	269.29	209.14	-470.81	452.99	713.04	1,122.37	1,766.70	2,780.93
Depreciation	60.96	75.60	84.21	134.76	-251.97	202.26	318.37	501.14	788.84	1,241.69
Accounts Receivable	-	-256.39	-525.63	-884.15	-2,187.87	42.17	-2,437.13	-3,836.23	-6,038.52	-9,505.10
Inventories	-	-19.06	-13.45	-15.93	-52.66	-74.47	-117.21	-184.50	-290.42	-457.15
Accounts Payable	-	47.40	148.50	50.33	127.59	266.59	419.63	660.53	1,039.72	1,636.60
Capital Expenditure	-62.79	-62.50	-138.40	-134.32	-170.81	-354.43	-557.90	-878.17	-1,382.31	-2,175.86
UFCF	-40.28	160.49	-175.47	-640.17	-3,006.53	535.11	-1,661.21	-2,614.86	-4,116	-6,478.89
WACC
PV UFCF						475.19	-1,309.99	-1,831.13	-2,559.57	-3,577.80
SUM PV UFCF										-8,803.30

Terminal Value

Growth in perpetuity method:
Long-term growth rate
WACC (%)	12.61
Free cash flow (t + 1)	-6,608.47
Terminal Value	-62,285.31
Present Value of Terminal Value	-34,395.44

Intrinsic Value

Enterprise Value	-43,198.74
Net Debt	1,465.25
Equity Value	-44,663.99
Shares Outstanding	501.78
Equity Value Per Share	-89.01