Discounted Cash Flow (DCF) Analysis Unlevered

Warner Music Group Corp. (WMG)

$23.21

+0.08 (+0.35%)
All numbers are in Millions, Currency in USD
Stock DCF: -153.52 | 23.21 | 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 3,5764,0054,4754,4635,3015,860.796,479.707,163.967,920.488,756.89
Revenue (%)
EBITDA 243836676-64881679.39751.14830.46918.161,015.11
EBITDA (%)
EBIT -8575407-325575314.06347.22383.89424.43469.25
EBIT (%)
Depreciation 251261269261306365.33403.91446.57493.73545.86
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 647514619553499780.23862.62953.711,054.431,165.78
Total Cash (%)
Account Receivables 404447775771839854.26944.481,044.211,154.481,276.40
Account Receivables (%)
Inventories 394274799987.1096.30106.47117.71130.14
Inventories (%)
Accounts Payable 208281260264302354.64392.09433.49479.27529.88
Accounts Payable (%)
Capital Expenditure -44-74-104-125-574-223.07-246.63-272.68-301.47-333.31
Capital Expenditure (%)

Weighted Average Cost Of Capital

Share price $ 23.21
Beta 1.578
Diluted Shares Outstanding 524.14
Cost of Debt
Tax Rate 33.33
After-tax Cost of Debt 2.21%
Risk-Free Rate
Market Risk Premium
Cost of Equity 11.251
Total Debt 3,676
Total Equity 12,165.24
Total Capital 15,841.24
Debt Weighting 23.21
Equity Weighting 76.79
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 3,5764,0054,4754,4635,3015,860.796,479.707,163.967,920.488,756.89
EBITDA 243836676-64881679.39751.14830.46918.161,015.11
EBIT -8575407-325575314.06347.22383.89424.43469.25
Tax Rate 7,250.00%30.54%4.12%-6.26%33.33%1,462.35%1,462.35%1,462.35%1,462.35%1,462.35%
EBIAT 572399.38390.23-345.36383.33-4,278.57-4,730.39-5,229.93-5,782.21-6,392.82
Depreciation 251261269261306365.33403.91446.57493.73545.86
Accounts Receivable --43-3284-68-15.26-90.21-99.74-110.27-121.91
Inventories --3-32-5-2011.90-9.20-10.17-11.24-12.43
Accounts Payable -73-2143852.6437.4541.4045.7850.61
Capital Expenditure -44-74-104-125-574-223.07-246.63-272.68-301.47-333.31
UFCF 779613.38174.23-206.3665.33-4,087.04-4,635.07-5,124.54-5,665.69-6,264
WACC
PV UFCF -3,744.42-3,890.53-3,940.79-3,991.70-4,043.27
SUM PV UFCF -19,610.72

Terminal Value

Growth in perpetuity method:
Long-term growth rate
WACC (%) 9.15
Free cash flow (t + 1) -6,389.28
Terminal Value -89,360.54
Present Value of Terminal Value -57,680.24

Intrinsic Value

Enterprise Value -77,290.96
Net Debt 3,177
Equity Value -80,467.96
Shares Outstanding 524.14
Equity Value Per Share -153.52