Valuation for OKTA SA Report report

	A	B	C	D	E	F	G	H	I	J	K	L	M	N	O	P	Q	R	S	T	U	V	W	X
1	OKTA DCF Valuation
2
3	TTM revenue growth	56.0%
4	Sustainable growth	3.5%
5	TTM FCF margin	7.0%
6	Long-term FCF margin (FY32)	30.0%
7	WACC (present)	10.3%
8	WACC (long-term)	8.0%
9	Option: inc SBC as expense?	No
10	TTM SBC % of revenue	43.5%
11	Long-term SBC % of revenue (FY32)	8.0%
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13	# periods from present		-2	-1	0	1	2	3	4	5	6	7	8	9	10	11	12	13	14	15	16	17	18	19
14			FY20	FY21	FY22	FY23	FY24	FY25	FY26	FY27	FY28	FY29	FY30	FY31	FY32	FY33	FY34	FY35	FY36	FY37	FY38	FY39	FY40	FY41
15	Revenue growth		46.9%	42.5%	60.0%	42.0%	17.0%	20.0%	20.0%	20.0%	17.5%	17.5%	17.5%	15.0%	15.0%	12.5%	12.5%	10.0%	10.0%	7.5%	7.5%	5.0%	5.0%	3.5%
16	Revenue ($m)		586	835	1,336	1,897	2,220	2,664	3,196	3,836	4,507	5,295	6,222	7,155	8,229	9,257	10,415	11,456	12,602	13,547	14,563	15,291	16,055	16,617
17	SBC % of revenue		21.6%	23.5%	43.5%	40.0%	36.4%	32.9%	29.3%	25.8%	22.2%	18.7%	15.1%	11.6%	8.0%	8.0%	8.0%	8.0%	8.0%	8.0%	8.0%	8.0%	8.0%	8.0%
18	FCF margin		4.7%	13.2%	7.0%	9.3%	11.6%	13.9%	16.2%	18.5%	20.8%	23.1%	25.4%	27.7%	30.0%	30.0%	30.0%	30.0%	30.0%	30.0%	30.0%	30.0%	30.0%	30.0%
19
20	FCFs ($m)		28	110	94	176	257	370	518	710	937	1,223	1,580	1,982	2,469	2,777	3,124	3,437	3,780	4,064	4,369	4,587	4,817	4,985
21	WACC					10.1%	9.8%	9.6%	9.4%	9.2%	8.9%	8.7%	8.5%	8.2%	8.0%	8.0%	8.0%	8.0%	8.0%	8.0%	8.0%	8.0%	8.0%	8.0%
22	Present value of FCFs					160	213	281	362	458	561	683	825	973	1143	1191	1241	1264	1287	1281	1275	1240	1205	1155
23		$m
24	Sum of PV of FCFs	16799
25	Terminal value	114659
26	PV of terminal value	26568
27	Enterprise value	43367
28
29	Total debt	2003	including operating leases
30	Non-operating assets	42	includes Other Current & Other Long-Term Assets, Assets Held for Sale, Equity Investments, & Other Long-Term Investments
31	Equity investment commitments	0
32	Excess cash investments	2452	includes Cash & Cash Equivalents, Short-Term Investments, & Trading Assets , multiplied by 98% (based on assumption of 2% required for operations)
33	Equity component of convertible debt	217
34	Noncontrolling interests	0
35	Value of employee options	1259
36	Value of RSUs ($m)	921
37	Purchase commitments	0
38	Equity value $m	41461	=B27-B29+B30+B31+B32-B33-B34-B35-B36-B37
39	# outstanding shares	157
40	Current share price	184.00
41	Intrinsic value per share	$264.08	<<< excluding SBC as cash expense
42	Upside	44%
43	Intrinsic value per share	$163.95	<<< including SBC as cash expense
44	Upside	-11%
45	Alternative value per share (using EV/FCF mult at FY32 & discounting back to PV)		<<< considerably more conservative by curtailing long-end growth
46	Avg EV/FCF for Software (apps & systems) industry	30
47	EV/FCF in FY32	74058.71843
48	Avg WACC	9.0%
49	PV of Enterprise Value	31176
50	Intrinsic value per share	$186.43	<<< excluding SBC as cash expense
51	Intrinsic value per share	$215.58	<<< including SBC as cash expense
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55	Options
56		SBC?
57		Yes
58		No
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