I ran this valuation a few days ago on 04-15-2016 and shared it on my socials but here is the official write up.
I used an un-levered beta of 1.23 based on Aswath Damodaran’s work for a software application/service company industry. This beta was re-levered to 1.18 using the Hamadi equation.
Effective tax rates, pre-tax cost of debt and base year drivers were all calculated using TTM or most current data pulled from stockanalysis.com.
The ERP or equity risk premium was 4.5 for equities centered in the US. Base year revenue growth was calculated with the TTM financials and came in at 10.96% growth. Let’s look at how I structured stage 1 of the DCF projection:
