Using an unlevered Free Cash Flow to Firm (FCFF) model, we project Advanced Micro Devices, Inc.'s cash flows over 5 years with line-by-line expense modeling. Revenue is projected revenue growing from 35.8% to 21.8% 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 75, DPO 61, DIO 129). At a 9.3% WACC with mid-year discounting, the terminal value (94% of enterprise value) is derived by applying the industry peer median EV/EBITDA multiple of 25.8x to Year 6 EBITDA. After subtracting net debt, the equity value implies a fair price of $238.51 per share, suggesting AMD is fairly valued by 8.3% at the current price of $220.27.
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 | 6,750 | 9,635 | 12,034 | 15,972 | 19,448 | 19,934 |
| (−) Net Interest | 168 | 239 | 299 | 397 | 483 | 495 |
| (+) D&A | 581 | 736 | 953 | 1,227 | 1,609 | 1,649 |
| EBITDA | 7,499 | 10,610 | 13,286 | 17,596 | 21,540 | 22,078 |
| (−) Tax | 0 | 0 | 0 | 0 | 0 | — |
| (−) CapEx | 1,075 | 1,534 | 1,916 | 2,544 | 3,097 | — |
| (−) ΔWC | 2,950 | 6,094 | 5,068 | 8,318 | 7,341 | — |
| Free Cash Flow (FCF) | 3,474 | 2,982 | 6,302 | 6,735 | 11,102 | — |
| Peers' EBITDA Multiple | 25.8x | |||||
| Terminal Value | 569,400 | |||||
| WACC / Discount Rate | 9.25% | |||||
| Timing of FCF (mid year) | 0.5 | 1.5 | 2.5 | 3.5 | 4.5 | 5 |
| Present Value of FCF | 3,323 | 2,611 | 5,051 | 4,941 | 7,455 | 365,806 |
| Enterprise Value | 389,188 | |||||
| Projection Period | 23,381 | 6.0% | ||||
| Terminal Value | 365,806 | 94.0% | ||||
| (−) Current Net Debt | (1,067) | |||||
| Equity Value | 390,255 | |||||
| (÷) Outstanding Shares | 1636M | |||||
| Fair Price | $239 | +8.3% | ||||
| WACC \ EV/EBITDA Exit Multiple | 21.8x | 23.8x | 25.8x | 27.8x | 29.8x |
|---|---|---|---|---|---|
| 7.3% | $223 | $242 | $261 | $280 | $299 |
| 8.3% | $213 | $231 | $249 | $268 | $286 |
| 9.3% | $204 | $221 | $239 | $256 | $273 |
| 10.3% | $195 | $212 | $228 | $245 | $261 |
| 11.3% | $187 | $203 | $218 | $234 | $250 |
Current price: $220.27. 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.