Discounted Cash Flow (DCF) Analysis Unlevered

Zynga Inc. (ZNGA)

$8.18

-0.17 (-2.04%)

All numbers are in Millions, Currency in USD

Stock DCF: 0.35 | 8.18 | 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	861.39	907.21	1,321.66	1,974.80	2,800.50	3,796.31	5,146.22	6,976.13	9,456.72	12,819.38
Revenue (%)
EBITDA	67.88	68.52	143.75	-233	289.90	188.77	255.89	346.89	470.23	637.44
EBITDA (%)
EBIT	37.58	26.46	64.31	-375.10	51	-38.17	-51.75	-70.15	-95.09	-128.90
EBIT (%)
Depreciation	30.29	42.06	79.45	142.10	238.90	226.94	307.64	417.03	565.32	766.34
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	681.38	581.22	1,361.50	1,572.80	1,153	2,786.48	3,777.30	5,120.45	6,941.20	9,409.37
Total Cash (%)
Account Receivables	103.68	91.63	140.08	217.50	242.50	397.91	539.40	731.21	991.21	1,343.67
Account Receivables (%)
Inventories	-	-	-	-	-	-	-	-	-	-
Inventories (%)
Accounts Payable	56.98	49.48	69.24	115.30	95.60	201.67	273.37	370.58	502.35	680.98
Accounts Payable (%)
Capital Expenditure	-9.97	-11.47	-23.64	-24.80	-16.80	-46.06	-62.43	-84.63	-114.73	-155.52
Capital Expenditure (%)

Weighted Average Cost Of Capital

Share price	$ 8.18
Beta	0.023
Diluted Shares Outstanding	1,016.80
Cost of Debt
Tax Rate	-1,170.73
After-tax Cost of Debt	3.96%
Risk-Free Rate
Market Risk Premium
Cost of Equity	4.770
Total Debt	1,494.30
Total Equity	8,317.42
Total Capital	9,811.72
Debt Weighting	15.23
Equity Weighting	84.77
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	861.39	907.21	1,321.66	1,974.80	2,800.50	3,796.31	5,146.22	6,976.13	9,456.72	12,819.38
EBITDA	67.88	68.52	143.75	-233	289.90	188.77	255.89	346.89	470.23	637.44
EBIT	37.58	26.46	64.31	-375.10	51	-38.17	-51.75	-70.15	-95.09	-128.90
Tax Rate	29.12%	41.59%	11.43%	-5.92%	-1,170.73%	-218.90%	-218.90%	-218.90%	-218.90%	-218.90%
EBIAT	26.64	15.46	56.96	-397.31	648.07	-121.73	-165.02	-223.70	-303.24	-411.07
Depreciation	30.29	42.06	79.45	142.10	238.90	226.94	307.64	417.03	565.32	766.34
Accounts Receivable	-	12.05	-48.45	-77.42	-25	-155.41	-141.49	-191.80	-260.01	-352.46
Inventories	-	-	-	-	-	-	-	-	-	-
Accounts Payable	-	-7.50	19.76	46.06	-19.70	106.07	71.71	97.21	131.77	178.63
Capital Expenditure	-9.97	-11.47	-23.64	-24.80	-16.80	-46.06	-62.43	-84.63	-114.73	-155.52
UFCF	46.96	50.59	84.08	-311.37	825.47	9.81	10.40	14.10	19.12	25.92
WACC
PV UFCF						9.37	9.50	12.31	15.94	20.65
SUM PV UFCF										67.77

Terminal Value

Growth in perpetuity method:
Long-term growth rate
WACC (%)	4.65
Free cash flow (t + 1)	26.44
Terminal Value	997.62
Present Value of Terminal Value	794.82

Intrinsic Value

Enterprise Value	862.59
Net Debt	510.30
Equity Value	352.29
Shares Outstanding	1,016.80
Equity Value Per Share	0.35