Discounted Cash Flow (DCF) Analysis Unlevered

2U, Inc. (TWOU)

$0.436

+0.01 (+3.49%)
All numbers are in Millions, Currency in USD
Stock DCF: -50.76 | 0.436 | overvalue

Operating Data

Year
A/P
2019
Actual
2020
Actual
2021
Actual
2022
Actual
2023
Actual
2024
Projected
2025
Projected
2026
Projected
2027
Projected
2028
Projected
Revenue 574.67774.53945.68963.08945.951,080.601,234.421,410.131,610.851,840.14
Revenue (%)
EBITDA -101.44-82.54-35.1938.86122.65-32.48-37.11-42.39-48.42-55.31
EBITDA (%)
EBIT -171.28-179.01-143.64-89.297.32-165.56-189.12-216.04-246.79-281.92
EBIT (%)
Depreciation 69.8496.47108.45128.15115.32133.07152.02173.65198.37226.61
Depreciation (%)

Balance Sheet Data

Year
A/P
2019
Actual
2020
Actual
2021
Actual
2022
Actual
2023
Actual
2024
Projected
2025
Projected
2026
Projected
2027
Projected
2028
Projected
Total Cash 170.59500.63232.93167.5273.40311.44355.77406.42464.27530.35
Total Cash (%)
Account Receivables 33.6546.6696.7396.64144.24102.42117133.66152.68174.41
Account Receivables (%)
Inventories 19.2818.2416.9815.0621.4424.5027.9831.9736.5241.72
Inventories (%)
Accounts Payable 65.38130.67166.46110.02103.38147.40168.38192.35219.73251
Accounts Payable (%)
Capital Expenditure -78.34-69.30-70.33-74.20-50.03-92.96-106.19-121.30-138.57-158.29
Capital Expenditure (%)

Weighted Average Cost Of Capital

Share price $ 0.436
Beta 0.839
Diluted Shares Outstanding 80.89
Cost of Debt
Tax Rate -0.52
After-tax Cost of Debt 7.50%
Risk-Free Rate
Market Risk Premium
Cost of Equity 8.126
Total Debt 994.97
Total Equity 35.27
Total Capital 1,030.24
Debt Weighting 96.58
Equity Weighting 3.42
Wacc

Build Up Free Cash

Year
A/P
2019
Actual
2020
Actual
2021
Actual
2022
Actual
2023
Actual
2024
Projected
2025
Projected
2026
Projected
2027
Projected
2028
Projected
Revenue 574.67774.53945.68963.08945.951,080.601,234.421,410.131,610.851,840.14
EBITDA -101.44-82.54-35.1938.86122.65-32.48-37.11-42.39-48.42-55.31
EBIT -171.28-179.01-143.64-89.297.32-165.56-189.12-216.04-246.79-281.92
Tax Rate 7.79%0.69%0.61%0.28%-0.52%1.77%1.77%1.77%1.77%1.77%
EBIAT -157.95-177.77-142.76-89.047.36-162.63-185.78-212.22-242.43-276.93
Depreciation 69.8496.47108.45128.15115.32133.07152.02173.65198.37226.61
Accounts Receivable --13.01-50.060.09-47.6041.81-14.58-16.65-19.02-21.73
Inventories -1.041.261.92-6.38-3.05-3.49-3.98-4.55-5.20
Accounts Payable -65.2935.78-56.44-6.6444.0220.9823.9727.3831.28
Capital Expenditure -78.34-69.30-70.33-74.20-50.03-92.96-106.19-121.30-138.57-158.29
UFCF -166.45-97.27-117.67-89.5212.03-39.72-137.03-156.54-178.82-204.27
WACC
PV UFCF -36.95-118.53-125.94-133.80-142.15
SUM PV UFCF -557.37

Terminal Value

Growth in perpetuity method:
Long-term growth rate
WACC (%) 7.52
Free cash flow (t + 1) -208.36
Terminal Value -3,774.59
Present Value of Terminal Value -2,626.78

Intrinsic Value

Enterprise Value -3,184.15
Net Debt 921.57
Equity Value -4,105.72
Shares Outstanding 80.89
Equity Value Per Share -50.76