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EVERTEC, Inc.

Intrinsic Value Analysis (Discounted Cash Flow)Industry: Software - InfrastructureSector: Technology

Fair Value Summary

Current Price$29.24
5Y Range51.90 – 84.03
5Y Selected67.97
(-) Safety Margin68.21%
5Y Buy Price$21.61
Upside (to Buy Price)-26.10%
10Y Range61.23 – 96.10
10Y Selected78.67
(-) Safety Margin68.21%
10Y Buy Price$25.01
Upside (to Buy Price)-14.47%

Company Predictability & Safety

MetricValue
Revenue R2 (5Y)0.9340
Revenue R2 (10Y)0.9169
Net Income R2 (5Y)0.0266
Net Income R2 (10Y)0.2663
EBITDA R2 (5Y)0.0947
EBITDA R2 (10Y)0.5937
FCF R2 (5Y)0.0534
FCF R2 (10Y)0.6424
Safety Score0.3179

DA 10-Year Projection

Metric2025202620272028202920302031203220332034
% Growth12.92%11.93%10.94%9.95%8.96%7.97%6.97%5.98%4.99%4.00%
Revenue954.731,068.631,185.531,303.461,420.201,533.321,640.251,738.381,825.151,898.16
EBITDA352.53394.59437.75481.30524.40566.17605.66641.89673.93700.88
D&A-140.58-157.35-174.57-191.93-209.12-225.78-241.52-255.97-268.75-279.50
EBIT211.95237.23263.18289.36315.28340.39364.13385.92405.18421.38
Pro forma Taxes-21.62-24.19-26.84-29.51-32.15-34.71-37.14-39.36-41.32-42.97
NOPAT190.33213.04236.34259.85283.13305.68327.00346.56363.86378.41
Capital Expenditures-105.47-118.05-130.96-143.99-156.89-169.38-181.20-192.04-201.62-209.69
NWC Investment-2.89-3.01-3.09-3.12-3.09-2.99-2.83-2.60-2.30-1.93
(+) D&A140.58157.35174.57191.93209.12225.78241.52255.97268.75279.50
Free Cash Flow222.56249.33276.85304.67332.27359.08384.49407.90428.69446.29
Diluted Shares Outstanding64,806,929.0064,806,929.0064,806,929.0064,806,929.0064,806,929.0064,806,929.0064,806,929.0064,806,929.0064,806,929.0064,806,929.00

Discounting Periods

MetricDec-25Dec-26Dec-27Dec-28Dec-29Dec-30Dec-31Dec-32Dec-33Dec-34
Period Start9/30/251/1/261/1/271/1/281/1/291/1/301/1/311/1/321/1/331/1/34
Period End12/31/2512/31/2612/31/2712/31/2812/31/2912/31/3012/31/3112/31/3212/31/3312/31/34
Mid-Point11/15/257/2/267/2/277/1/287/2/297/2/307/2/317/1/327/2/337/2/34
Time (t)0.100.461.462.463.464.465.466.467.468.46
Valuation Date1/16/26

Base Case Projected Flows

WACC: 9.10%Terminal Growth: 2.46%
Metric2025202620272028202920302031203220332034TV (5y)TV (10y)
Discount Factor0.990.960.880.810.740.680.620.570.520.48
PV UFCF220.63239.54243.80245.93245.84243.52239.01232.41223.89213.64
Raw: 5,127.49
3,632.03
Raw: 6,886.98
3,156.39

Base Case Valuation

5-Year Horizon10-Year Horizon
UFCFUFCF
Enterprise Value4,827.775,504.59
(-) Net Debt658.05658.05
Equity Value4,169.724,846.54
(/) Shares Out64.8164.81
Fair Value$64.34$74.78
(-) Safety Margin68.21%68.21%
Buy Price$20.45$23.77
Current Price$29.24$29.24
Upside (to Buy Price)-30.05%-18.69%

Conservative Projected Flows

WACC: 10.10%Terminal Growth: 1.96%
Metric2025202620272028202920302031203220332034TV (5y)TV (10y)
Discount Factor0.990.960.870.790.720.650.590.540.490.44
PV UFCF220.43238.54240.58240.47238.20233.81227.39219.11209.15197.77
Raw: 4,162.15
2,843.62
Raw: 5,590.39
2,361.01

Conservative Valuation

5-Year Horizon10-Year Horizon
UFCFUFCF
Enterprise Value4,021.834,626.45
(-) Net Debt658.05658.05
Equity Value3,363.783,968.41
(/) Shares Out64.8164.81
Fair Value$51.90$61.23
(-) Safety Margin68.21%68.21%
Buy Price$16.50$19.47
Current Price$29.24$29.24
Upside (to Buy Price)-43.57%-33.43%

Aggressive Projected Flows

WACC: 8.10%Terminal Growth: 2.96%
Metric2025202620272028202920302031203220332034TV (5y)TV (10y)
Discount Factor0.990.960.890.830.760.710.650.600.560.52
PV UFCF220.83240.56247.10251.56253.80253.73251.33246.66239.81230.95
Raw: 6,656.29
4,890.06
Raw: 8,940.39
4,449.90

Aggressive Valuation

5-Year Horizon10-Year Horizon
UFCFUFCF
Enterprise Value6,103.916,886.22
(-) Net Debt658.05658.05
Equity Value5,445.866,228.17
(/) Shares Out64.8164.81
Fair Value$84.03$96.10
(-) Safety Margin68.21%68.21%
Buy Price$26.71$30.55
Current Price$29.24$29.24
Upside (to Buy Price)-8.64%4.48%

Reverse DCF: Market Implied Growth

Current Price$29.24
WACC Used9.1%
IMPLIED REVENUE GROWTH130.21%
Metric2027202820292030203120322033203420352036
Implied Revenue2,079.704,787.7211,021.9225,373.8258,413.68134,475.53309,579.34712,690.041,640,700.853,777,096.85
Constant Implied Growth130.21%130.21%130.21%130.21%130.21%130.21%130.21%130.21%130.21%130.21%
Implied Free Cash Flow0.210.481.102.545.8413.4530.9671.27164.07377.71
Discount Factor0.930.810.740.680.620.570.520.480.440.40
Present Value of Implied FCF0.190.390.821.723.637.6616.1734.1271.99151.91

Rolling Historical DCF (Backtest)

Valuation based on actual realized growth.
YearValuation DateActual PriceRealized Growth (5Y)Calculated Fair ValueValuation Delta
20192019-12-31$34.0415.02%$41.0420.57%
20182018-12-31$28.7011.56%$38.1532.94%
20172017-12-31$13.659.21%$26.8596.70%
20162016-12-31$17.758.80%$29.2664.87%
20152015-12-31$16.747.86%$23.4039.77%
20142014-12-31$22.138.42%$23.104.38%
20132013-12-31$24.667.58%$0.07-99.74%
20122012-12-31$20.445.62%$4.43-78.34%
20112011-12-31$20.442.91%$4.37-78.63%

Monte Carlo Simulation (1,000 Iterations)

Mean Fair Value
$77.76
Median
$75.32
10th Percentile
$61.09
90th Percentile
$98.76

Fair Value Distribution

$46.81 - $52.38
7
$52.38 - $57.95
49
$57.95 - $63.53
103
$63.53 - $69.10
153
$69.10 - $74.67
173
$74.67 - $80.24
144
$80.24 - $85.82
119
$85.82 - $91.39
85
$91.39 - $96.96
49
$96.96 - $102.53
45
$102.53 - $108.11
31
$108.11 - $113.68
21
$113.68 - $119.25
10
$119.25 - $124.83
6
$124.83 - $130.40
2
$130.40 - $135.97
1
$135.97 - $141.54
0
$141.54 - $147.12
0
$147.12 - $152.69
0
$152.69 - $158.26
2