Using an unlevered Free Cash Flow to Firm (FCFF) model, we project Apple Inc.'s cash flows over 5 years with line-by-line expense modeling. Revenue is projected revenue growing from 11.5% to 20.4% annually, with expenses (COGS, SG&A, R&D) held at historical ratios. Depreciation is computed from a vintage matrix based on a 5-year useful life. Working capital is modeled using historical turnover days (DSO 58, DPO 108, DIO 10). At a 9.3% WACC with mid-year discounting, the terminal value (82% of enterprise value) is derived by applying the industry peer median EV/EBITDA multiple of 19.2x to Year 6 EBITDA. After subtracting net debt, the equity value implies a fair price of $191.17 per share, suggesting AAPL is overvalued by 24.3% at the current price of $252.62.
Adjust parameters to explore scenarios. Changes are for exploration only and do not affect saved valuations.
| 2026 | 2027 | 2028 | 2029 | 2030 | Terminal | |
|---|---|---|---|---|---|---|
| Profit Before Tax | 140,017 | 149,328 | 157,981 | 145,779 | 175,531 | 179,920 |
| (−) Net Interest | 2,313 | 2,467 | 2,610 | 2,408 | 2,900 | 2,972 |
| (+) D&A | 10,983 | 11,378 | 12,023 | 12,779 | 13,610 | 13,950 |
| EBITDA | 153,313 | 163,174 | 172,614 | 160,966 | 192,041 | 196,842 |
| (−) Tax | 23,502 | 25,065 | 26,518 | 24,470 | 29,464 | — |
| (−) CapEx | 13,063 | 13,931 | 14,739 | 13,600 | 16,376 | — |
| (−) ΔWC | -4,268 | 302 | 281 | -396 | 966 | — |
| Free Cash Flow (FCF) | 121,016 | 123,874 | 131,077 | 123,293 | 145,235 | — |
| Peers' EBITDA Multiple | 19.2x | |||||
| Terminal Value | 3,781,328 | |||||
| WACC / Discount Rate | 9.26% | |||||
| Timing of FCF (mid year) | 0.5 | 1.5 | 2.5 | 3.5 | 4.5 | 5 |
| Present Value of FCF | 115,773 | 108,461 | 105,037 | 90,424 | 97,486 | 2,428,180 |
| Enterprise Value | 2,945,361 | |||||
| Projection Period | 517,181 | 17.6% | ||||
| Terminal Value | 2,428,180 | 82.4% | ||||
| (−) Current Net Debt | 76,443 | |||||
| Equity Value | 2,868,918 | |||||
| (÷) Outstanding Shares | 15005M | |||||
| Fair Price | $191 | -24.3% | ||||
| WACC \ EV/EBITDA Exit Multiple | 15.2x | 17.2x | 19.2x | 21.2x | 23.2x |
|---|---|---|---|---|---|
| 7.3% | $171 | $190 | $208 | $227 | $245 |
| 8.3% | $164 | $182 | $200 | $217 | $235 |
| 9.3% | $157 | $174 | $191 | $208 | $225 |
| 10.3% | $151 | $167 | $183 | $199 | $215 |
| 11.3% | $145 | $160 | $176 | $191 | $206 |
Current price: $252.62. Green = undervalued, Red = overvalued.
Based on default parameters
This is an unlevered Free Cash Flow to Firm (FCFF) model with a 5-year projection period. Revenue, expenses, D&A, and working capital are projected using the same line-by-line approach as the Growth Exit models. The key difference is the terminal value methodology: instead of assuming perpetual cash flow growth, the terminal value is calculated by applying the industry peer median EV/EBITDA multiple to the projected Year 6 EBITDA.
Using a peer exit multiple anchors the terminal value to how the market currently prices comparable companies, rather than relying on a theoretical perpetual growth assumption. This approach captures relative valuation dynamics and is particularly useful when a company is expected to converge toward industry-average profitability over time. The sensitivity matrix shows how fair value changes across different WACC and EV/EBITDA multiple scenarios.