Stock Analysis on Net
Stock Analysis on Net

Autodesk Inc. (NASDAQ:ADSK)

This company has been moved to the archive! The financial data has not been updated since December 3, 2021.

Present Value of Free Cash Flow to the Firm (FCFF)

Microsoft Excel

In discounted cash flow (DCF) valuation techniques the value of the stock is estimated based upon present value of some measure of cash flow. Free cash flow to the firm (FCFF) is generally described as cash flows after direct costs and before any payments to capital suppliers.

Intrinsic Stock Value (Valuation Summary)

Autodesk Inc., free cash flow to the firm (FCFF) forecast

US$ in thousands, except per share data

Microsoft Excel
Year Value FCFFt or Terminal value (TVt) Calculation Present value at 17.76%
01 FCFF0 1,390,833
1 FCFF1 1,352,879 = 1,390,833 × (1 + -2.73%) 1,148,825
2 FCFF2 1,376,061 = 1,352,879 × (1 + 1.71%) 992,265
3 FCFF3 1,460,769 = 1,376,061 × (1 + 6.16%) 894,471
4 FCFF4 1,615,583 = 1,460,769 × (1 + 10.60%) 840,058
5 FCFF5 1,858,575 = 1,615,583 × (1 + 15.04%) 820,644
5 Terminal value (TV5) 78,564,641 = 1,858,575 × (1 + 15.04%) ÷ (17.76% – 15.04%) 34,689,808
Intrinsic value of Autodesk Inc. capital 39,386,071
Less: Long-term notes payable, including current portion (fair value) 1,815,000
Intrinsic value of Autodesk Inc. common stock 37,571,071
 
Intrinsic value of Autodesk Inc. common stock (per share) $170.80
Current share price $259.02

Based on: 10-K (reporting date: 2021-01-31).

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Disclaimer!
Valuation is based on standard assumptions. There may exist specific factors relevant to stock value and omitted here. In such a case, the real stock value may differ significantly form the estimated. If you want to use the estimated intrinsic stock value in investment decision making process, do so at your own risk.

Weighted Average Cost of Capital (WACC)

Autodesk Inc., cost of capital

Microsoft Excel
Value1 Weight Required rate of return2 Calculation
Equity (fair value) 56,977,514 0.97 18.25%
Long-term notes payable, including current portion (fair value) 1,815,000 0.03 2.54% = 3.49% × (1 – 27.20%)

Based on: 10-K (reporting date: 2021-01-31).

1 US$ in thousands

   Equity (fair value) = No. shares of common stock outstanding × Current share price
= 219,973,417 × $259.02
= $56,977,514,471.34

   Long-term notes payable, including current portion (fair value). See details »

2 Required rate of return on equity is estimated by using CAPM. See details »

   Required rate of return on debt. See details »

   Required rate of return on debt is after tax.

   Estimated (average) effective income tax rate
= (21.00% + 23.98% + 21.00% + 71.56% + 35.00% + 35.00%) ÷ 6
= 27.20%

WACC = 17.76%

FCFF Growth Rate (g)

FCFF growth rate (g) implied by PRAT model

Autodesk Inc., PRAT model

Microsoft Excel
Average Jan 31, 2021 Jan 31, 2020 Jan 31, 2019 Jan 31, 2018 Jan 31, 2017 Jan 31, 2016
Selected Financial Data (US$ in thousands)
Interest and investment expense, net 51,100 54,000 52,100 34,500 29,700 33,900
Net income (loss) 1,208,200 214,500 (80,800) (566,900) (582,100) (330,500)
 
Effective income tax rate (EITR)1 21.00% 23.98% 21.00% 71.56% 35.00% 35.00%
 
Interest and investment expense, net, after tax2 40,369 41,051 41,159 9,812 19,305 22,035
Interest expense (after tax) and dividends 40,369 41,051 41,159 9,812 19,305 22,035
 
EBIT(1 – EITR)3 1,248,569 255,551 (39,641) (557,088) (562,795) (308,465)
 
Current portion of long-term notes payable, net — 449,700 — — 398,700 —
Long-term notes payable, net, excluding current portion 1,637,200 1,635,100 2,087,700 1,586,000 1,092,000 1,487,700
Stockholders’ equity (deficit) 965,500 (139,100) (210,900) (256,000) 733,600 1,619,600
Total capital 2,602,700 1,945,700 1,876,800 1,330,000 2,224,300 3,107,300
Financial Ratios
Retention rate (RR)4 0.97 0.84 — — — —
Return on invested capital (ROIC)5 47.97% 13.13% -2.11% -41.89% -25.30% -9.93%
Averages
RR 0.90
ROIC -3.02%
 
FCFF growth rate (g)6 -2.73%

Based on: 10-K (reporting date: 2021-01-31), 10-K (reporting date: 2020-01-31), 10-K (reporting date: 2019-01-31), 10-K (reporting date: 2018-01-31), 10-K (reporting date: 2017-01-31), 10-K (reporting date: 2016-01-31).

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2021 Calculations

2 Interest and investment expense, net, after tax = Interest and investment expense, net × (1 – EITR)
= 51,100 × (1 – 21.00%)
= 40,369

3 EBIT(1 – EITR) = Net income (loss) + Interest and investment expense, net, after tax
= 1,208,200 + 40,369
= 1,248,569

4 RR = [EBIT(1 – EITR) – Interest expense (after tax) and dividends] ÷ EBIT(1 – EITR)
= [1,248,569 – 40,369] ÷ 1,248,569
= 0.97

5 ROIC = 100 × EBIT(1 – EITR) ÷ Total capital
= 100 × 1,248,569 ÷ 2,602,700
= 47.97%

6 g = RR × ROIC
= 0.90 × -3.02%
= -2.73%

FCFF growth rate (g) implied by single-stage model

g = 100 × (Total capital, fair value0 × WACC – FCFF0) ÷ (Total capital, fair value0 + FCFF0)
= 100 × (58,792,514 × 17.76% – 1,390,833) ÷ (58,792,514 + 1,390,833)
= 15.04%

where:

Total capital, fair value0 = current fair value of Autodesk Inc. debt and equity (US$ in thousands)
FCFF0 = the last year Autodesk Inc. free cash flow to the firm (US$ in thousands)
WACC = weighted average cost of Autodesk Inc. capital

FCFF growth rate (g) forecast

Autodesk Inc., H-model

Microsoft Excel
Year Value gt
1 g1 -2.73%
2 g2 1.71%
3 g3 6.16%
4 g4 10.60%
5 and thereafter g5 15.04%

where:
g1 is implied by PRAT model
g5 is implied by single-stage model
g2, g3 and g4 are calculated using linear interpoltion between g1 and g5

Calculations

g2 = g1 + (g5 – g1) × (2 – 1) ÷ (5 – 1)
= -2.73% + (15.04% – -2.73%) × (2 – 1) ÷ (5 – 1)
= 1.71%

g3 = g1 + (g5 – g1) × (3 – 1) ÷ (5 – 1)
= -2.73% + (15.04% – -2.73%) × (3 – 1) ÷ (5 – 1)
= 6.16%

g4 = g1 + (g5 – g1) × (4 – 1) ÷ (5 – 1)
= -2.73% + (15.04% – -2.73%) × (4 – 1) ÷ (5 – 1)
= 10.60%