Discounted Cash Flow (DCF) Analysis Unlevered

2U, Inc. (TWOU)

$6.07

+0.26 (+4.48%)
All numbers are in Millions, Currency in USD
Stock DCF: -255.35 | 6.07 | 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 -11.01-10.30-171.82-92.70-36.29-132.90-179.43-242.24-327.05-441.54
EBITDA (%)
EBIT -30.63-43.09-241.66-189.17-144.74-262.83-354.84-479.07-646.78-873.21
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 14.1732.6433.6546.6696.7389.32120.58162.80219.79296.74
Account Receivables (%)
Inventories ----------
Inventories (%)
Accounts Payable 22.6327.6565.38130.67166.46154.37208.42281.38379.89512.89
Accounts Payable (%)
Capital Expenditure -51.14-77.19-78.34-6.52-70.33-149.36-201.64-272.24-367.54-496.21
Capital Expenditure (%)

Weighted Average Cost Of Capital

Share price $ 6.07
Beta 1.040
Diluted Shares Outstanding 67.14
Cost of Debt
Tax Rate 0.61
After-tax Cost of Debt 5.32%
Risk-Free Rate
Market Risk Premium
Cost of Equity 8.859
Total Debt 957.97
Total Equity 407.56
Total Capital 1,365.52
Debt Weighting 70.15
Equity Weighting 29.85
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 -11.01-10.30-171.82-92.70-36.29-132.90-179.43-242.24-327.05-441.54
EBIT -30.63-43.09-241.66-189.17-144.74-262.83-354.84-479.07-646.78-873.21
Tax Rate 4.22%11.27%7.79%0.69%0.61%4.92%4.92%4.92%4.92%4.92%
EBIAT -29.34-38.23-222.85-187.85-143.86-249.91-337.40-455.51-614.98-830.28
Depreciation 19.6232.7869.8496.47108.45129.93175.41236.82319.73431.66
Accounts Receivable --18.46-1.02-13.01-50.067.41-31.27-42.22-56.99-76.95
Inventories ----------
Accounts Payable -5.0237.7365.2935.78-12.0854.0472.9698.51133
Capital Expenditure -51.14-77.19-78.34-6.52-70.33-149.36-201.64-272.24-367.54-496.21
UFCF -60.85-96.08-194.63-45.62-120.02-274.01-340.85-460.18-621.28-838.78
WACC
PV UFCF -257.60-301.25-382.36-485.30-615.96
SUM PV UFCF -2,042.47

Terminal Value

Growth in perpetuity method:
Long-term growth rate
WACC (%) 6.37
Free cash flow (t + 1) -855.56
Terminal Value -19,577.99
Present Value of Terminal Value -14,377.13

Intrinsic Value

Enterprise Value -16,419.60
Net Debt 725.03
Equity Value -17,144.64
Shares Outstanding 67.14
Equity Value Per Share -255.35