Using an unlevered Free Cash Flow to Firm (FCFF) model, we project Biogen Inc.'s cash flows over 5 years with line-by-line expense modeling. Revenue is projected revenue growing from -3.9% to 0.8% 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 72, DPO 72, DIO 295). At a 7.3% WACC with mid-year discounting, the terminal value (78% of enterprise value) is derived by applying the industry peer median EV/EBITDA multiple of 17.7x to Year 6 EBITDA. After subtracting net debt, the equity value implies a fair price of $269.46 per share, suggesting BIIB is undervalued by 41.0% at the current price of $191.11.
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 | 2,155 | 2,138 | 2,165 | 2,177 | 2,195 | 2,250 |
| (−) Net Interest | 233 | 231 | 234 | 235 | 237 | 243 |
| (+) D&A | 265 | 263 | 264 | 252 | 230 | 235 |
| EBITDA | 2,652 | 2,632 | 2,663 | 2,664 | 2,662 | 2,729 |
| (−) Tax | 229 | 227 | 230 | 231 | 233 | — |
| (−) CapEx | 248 | 246 | 249 | 251 | 253 | — |
| (−) ΔWC | -352 | -25 | 41 | 18 | 27 | — |
| Free Cash Flow (FCF) | 2,527 | 2,184 | 2,143 | 2,164 | 2,149 | — |
| Peers' EBITDA Multiple | 17.7x | |||||
| Terminal Value | 48,322 | |||||
| WACC / Discount Rate | 7.28% | |||||
| Timing of FCF (mid year) | 0.5 | 1.5 | 2.5 | 3.5 | 4.5 | 5 |
| Present Value of FCF | 2,440 | 1,965 | 1,798 | 1,692 | 1,567 | 34,008 |
| Enterprise Value | 43,469 | |||||
| Projection Period | 9,462 | 21.8% | ||||
| Terminal Value | 34,008 | 78.2% | ||||
| (−) Current Net Debt | 3,940 | |||||
| Equity Value | 39,530 | |||||
| (÷) Outstanding Shares | 147M | |||||
| Fair Price | $269 | +41.0% | ||||
| WACC \ EV/EBITDA Exit Multiple | 13.7x | 15.7x | 17.7x | 19.7x | 21.7x |
|---|---|---|---|---|---|
| 5.3% | $238 | $266 | $295 | $324 | $353 |
| 6.3% | $227 | $255 | $282 | $309 | $337 |
| 7.3% | $217 | $243 | $269 | $296 | $322 |
| 8.3% | $208 | $233 | $258 | $283 | $308 |
| 9.3% | $199 | $222 | $246 | $270 | $294 |
Current price: $191.11. 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.