Valuation tool
Multiple X-Ray.
Enter a valuation multiple, WACC, and expected growth to see what the price assumes and how much value depends on cash flows far into the future.
Set your multiple, required return, and expected growth.
Enterprise value over forward unlevered free cash flow — the multiple you'd pay today.
Weighted average cost of capital: the annual return you require to hold this.
The rate UFCF is assumed to grow every year forever, beyond the forecast.
At 20.0x, the price assumes 4% perpetual growth, and your 4% view justifies 20.0x.
Your fair value lands in line with the price.
Before discounting, the growing cash flows pay back the price in about 15 years.
Either way, 62.5% of what you pay today rests on cash flows beyond year 10.
At the market price
implied g = 4%20.9%Years 1–5
16.5%Years 6–10
62.5%Year 11+
| growth | ||||||
|---|---|---|---|---|---|---|
| 2% | 3% | 4% | 5% | 6% | ||
| WACC | 7% | 20.0x0% | 25.0x+25% | 33.3x+66.7% | 50.0x+150% | 100.0x+400% |
| 8% | 16.7x-16.7% | 20.0x0% | 25.0x+25% | 33.3x+66.7% | 50.0x+150% | |
| 9% | 14.3x-28.6% | 16.7x-16.7% | 20.0x (your case)0% | 25.0x+25% | 33.3x+66.7% | |
| 10% | 12.5x-37.5% | 14.3x-28.6% | 16.7x-16.7% | 20.0x0% | 25.0x+25% | |
| 11% | 11.1x-44.4% | 12.5x-37.5% | 14.3x-28.6% | 16.7x-16.7% | 20.0x0% | |
“Price is what you pay; value is what you get.” — Benjamin Graham
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