DCF Studio

    INTU · NMS · Technology

    Intuit Inc.

    Also onShortfallConsensus DriftCrosscheck

    Implied value per share

    USD 361.69

    Market price

    USD 303.19

    Implied upside

    +19.3%

    5-year forecast · Perpetuity growth terminal value · Mid-year discounting · Base case

    Value Per Share

    Perpetuity growth
    USD 361.69+19.3%
    Exit multiple
    USD 444.57+46.6%
    Market price
    USD 303.19

    Same forecast, different terminal treatment. Percentages vs price.

    Forecast Cashflows

    Reporting currency (USD). Outflows negative.

    0bn5bn9bnFY27FY28FY29FY30FY31
    Nominal FCFFDiscounted to todayUSD
    LineFY27FY28FY29FY30FY31CAGR
    RevenueUSD 24.5bnUSD 28.0bnUSD 32.0bnUSD 36.6bnUSD 41.8bn+14.3%
    EBITUSD 6.2bnUSD 7.0bnUSD 8.0bnUSD 9.2bnUSD 10.5bn+14.3%
    NOPATUSD 4.9bnUSD 5.6bnUSD 6.4bnUSD 7.3bnUSD 8.4bn+14.3%
    Add depreciation & amortisationUSD 1.1bnUSD 1.3bnUSD 1.5bnUSD 1.7bnUSD 2.0bn+14.3%
    Less capital expenditureUSD -308.5mUSD -352.5mUSD -402.9mUSD -460.5mUSD -526.2m+14.3%
    Less increase in working capitalUSD -247.9mUSD -283.4mUSD -323.8mUSD -370.1mUSD -423.0m+14.3%
    Free cashflow to firmUSD 5.5bnUSD 6.3bnUSD 7.2bnUSD 8.2bnUSD 9.4bn+14.3%
    Discount factor0.95430.86910.79150.72080.6564-
    Present valueUSD 5.3bnUSD 5.5bnUSD 5.7bnUSD 5.9bnUSD 6.2bn+4.1%
    Present Value Of The ForecastUSD 28.5bn

    Discount Rate

    Source shown per component. All overridable above.

    Risk-free rate5.00%US 10-year Treasury (^TNX)
    Equity risk premium5.50%Market assumption
    Beta0.984Reported 0.976, pulled toward 1.0 (Blume)
    Cost of equity10.41%Risk-free + beta x equity risk premium
    Cost of debt5.00%Floored at the risk-free rate (implied cost of debt was lower)
    Market capitalisationUSD 81.0bn90.6% of capital
    Total debtUSD 8.4bn9.4% of capital, book value as a proxy
    Tax rate20.1%Effective, capped at statutory
    WACC9.81%E/V x Re + D/V x Rd x (1 - t)

    Terminal Value

    Perpetuity growth is intrinsic. The exit multiple defaults to the company's current EV/EBITDA, so it answers a different question - what the shares are worth if today's rating holds and EBITDA grows as forecast.

    Perpetuity growth at 2.50%

    Value per shareUSD 361.69

    72% of EV

    Forecast FCFF, final year
    USD 9.4bn
    Capex at depreciation, working capital in reinvestment
    USD 9.6bn
    Less reinvestment at g/ROIC (17.9% of NOPAT)
    USD -1.7bn
    Capitalised
    USD 7.9bn
    ROIC (reported)
    14.0%
    Terminal value, undiscounted
    USD 111.0bn
    Terminal value, discounted
    USD 72.9bn
    Enterprise value
    USD 101.4bn
    Less net debt
    USD 1.2bn
    Equity value
    USD 100.2bn

    Exit at 11.7x EBITDA

    Value per shareUSD 444.57

    77% of EV

    Terminal value, undiscounted
    USD 146.0bn
    Terminal value, discounted
    USD 95.8bn
    Enterprise value
    USD 124.4bn
    Less net debt
    USD 1.2bn
    Equity value
    USD 123.1bn

    Spread between methods: 21%.

    Sensitivity

    Value per share (USD) by discount rate and long-run growth.

    Long-run growth
    Discount rate1.50%2.00%2.50%3.00%3.50%
    7.81%460.08477.09497.13521.16550.57
    8.81%396.20406.68418.68432.61449.00
    9.81%347.73354.31361.68370.02379.55
    10.81%309.70313.84318.39323.42329.03
    11.81%279.07281.62284.38287.36290.60

    Outlined: this model. Green text: above today's price of 303.19. Shading: distance from this model's own value.

    Priced In

    What each input would have to be to justify the current price, one at a time.

    InputModelImpliedGap
    Revenue growth, every year14.3%9.8%-4.5pp
    EBIT margin25.1%20.6%-4.6pp
    Discount rate9.8%11.2%+1.4pp
    Download as Excel

    Live formulas, not pasted numbers - edit a driver and the workbook reprices.

    Yahoo Finance and RBA data. General information, not advice. Methodology.