Discounted Cash Flow (DCF) Analysis Unlevered

2U, Inc. (TWOU)

$7.91

+0.30 (+3.94%)
All numbers are in Millions, Currency in USD
Stock DCF: -254.71 | 7.91 | overvalue

Operating Data

Year
A/P
2017
Actual
2018
Actual
2019
Actual
2020
Actual
2021
Actual
2022
Projected
2023
Projected
2024
Projected
2025
Projected
2026
Projected
Revenue 286.75411.77574.67774.53945.681,276.751,723.732,327.183,141.904,241.83
Revenue (%)
EBITDA -11.01-10.30-171.82-94.21-36.29-133.40-180.10-243.15-328.28-443.20
EBITDA (%)
EBIT -30.63-43.09-241.66-190.68-144.74-263.33-355.51-479.97-648.01-874.87
EBIT (%)
Depreciation 19.6232.7869.8496.47108.45129.93175.41236.82319.73431.66
Depreciation (%)

Balance Sheet Data

Year
A/P
2017
Actual
2018
Actual
2019
Actual
2020
Actual
2021
Actual
2022
Projected
2023
Projected
2024
Projected
2025
Projected
2026
Projected
Total Cash 223.37474.77170.59500.63232.93797.081,076.121,452.861,961.482,648.17
Total Cash (%)
Account Receivables 14.1732.6433.6546.2896.7389.19120.41162.57219.48296.32
Account Receivables (%)
Inventories ----------
Inventories (%)
Accounts Payable 22.6327.6565.3822.3149.9787.19117.72158.93214.57289.69
Accounts Payable (%)
Capital Expenditure -51.14-77.19-78.34-69.30-70.33-170.05-229.59-309.96-418.48-564.98
Capital Expenditure (%)

Weighted Average Cost Of Capital

Share price $ 7.91
Beta 0.993
Diluted Shares Outstanding 74.58
Cost of Debt
Tax Rate 0.61
After-tax Cost of Debt 5.34%
Risk-Free Rate
Market Risk Premium
Cost of Equity 8.378
Total Debt 954.47
Total Equity 589.93
Total Capital 1,544.40
Debt Weighting 61.80
Equity Weighting 38.20
Wacc

Build Up Free Cash

Year
A/P
2017
Actual
2018
Actual
2019
Actual
2020
Actual
2021
Actual
2022
Projected
2023
Projected
2024
Projected
2025
Projected
2026
Projected
Revenue 286.75411.77574.67774.53945.681,276.751,723.732,327.183,141.904,241.83
EBITDA -11.01-10.30-171.82-94.21-36.29-133.40-180.10-243.15-328.28-443.20
EBIT -30.63-43.09-241.66-190.68-144.74-263.33-355.51-479.97-648.01-874.87
Tax Rate 4.22%11.27%7.79%0.69%0.61%4.92%4.92%4.92%4.92%4.92%
EBIAT -29.34-38.23-222.85-189.36-143.86-250.38-338.04-456.38-616.15-831.86
Depreciation 19.6232.7869.8496.47108.45129.93175.41236.82319.73431.66
Accounts Receivable --18.46-1.02-12.62-50.457.54-31.22-42.16-56.91-76.84
Inventories ----------
Accounts Payable -5.0237.73-43.0727.6637.2330.5341.2155.6475.12
Capital Expenditure -51.14-77.19-78.34-69.30-70.33-170.05-229.59-309.96-418.48-564.98
UFCF -60.85-96.08-194.63-217.88-128.53-245.75-392.91-530.46-716.17-966.90
WACC
PV UFCF -230.75-346.41-439.14-556.70-705.72
SUM PV UFCF -2,278.72

Terminal Value

Growth in perpetuity method:
Long-term growth rate
WACC (%) 6.50
Free cash flow (t + 1) -986.23
Terminal Value -21,916.29
Present Value of Terminal Value -15,996.28

Intrinsic Value

Enterprise Value -18,275
Net Debt 721.53
Equity Value -18,996.54
Shares Outstanding 74.58
Equity Value Per Share -254.71