Using an unlevered Free Cash Flow to Firm (FCFF) model, we project The Allstate Corporation's cash flows over 5 years with line-by-line expense modeling. Revenue is projected revenue growing from -6.4% to 8.1% 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 124, DPO 30, DIO 60). At a 7.7% WACC with mid-year discounting, the terminal value (72% of enterprise value) is derived by applying the industry peer median EV/EBITDA multiple of 8.2x to Year 6 EBITDA. After subtracting net debt, the equity value implies a fair price of $499.64 per share, suggesting ALL is undervalued by 141.5% at the current price of $206.88.
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 | 12,769 | 13,470 | 14,030 | 15,165 | 16,393 | 16,802 |
| (−) Net Interest | 403 | 425 | 443 | 479 | 518 | 530 |
| (+) D&A | 294 | 292 | 278 | 298 | 336 | 344 |
| EBITDA | 13,467 | 14,187 | 14,751 | 15,942 | 17,246 | 17,677 |
| (−) Tax | 2,644 | 2,789 | 2,905 | 3,140 | 3,394 | — |
| (−) CapEx | 334 | 352 | 367 | 397 | 429 | — |
| (−) ΔWC | 4,500 | 1,382 | 1,103 | 2,239 | 2,421 | — |
| Free Cash Flow (FCF) | 5,989 | 9,664 | 10,376 | 10,166 | 11,002 | — |
| Peers' EBITDA Multiple | 8.2x | |||||
| Terminal Value | 145,658 | |||||
| WACC / Discount Rate | 7.73% | |||||
| Timing of FCF (mid year) | 0.5 | 1.5 | 2.5 | 3.5 | 4.5 | 5 |
| Present Value of FCF | 5,770 | 8,642 | 8,613 | 7,833 | 7,869 | 100,366 |
| Enterprise Value | 139,092 | |||||
| Projection Period | 38,726 | 27.8% | ||||
| Terminal Value | 100,366 | 72.2% | ||||
| (−) Current Net Debt | 6,812 | |||||
| Equity Value | 132,280 | |||||
| (÷) Outstanding Shares | 265M | |||||
| Fair Price | $500 | +141.6% | ||||
| WACC \ EV/EBITDA Exit Multiple | 4.2x | 6.2x | 8.2x | 10.2x | 12.2x |
|---|---|---|---|---|---|
| 5.7% | $342 | $443 | $544 | $645 | $746 |
| 6.7% | $328 | $425 | $521 | $618 | $714 |
| 7.7% | $316 | $408 | $500 | $592 | $684 |
| 8.7% | $303 | $391 | $479 | $567 | $655 |
| 9.7% | $292 | $376 | $460 | $544 | $627 |
Current price: $206.88. 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.