Using an unlevered Free Cash Flow to Firm (FCFF) model, we project Boston Scientific Corporation's cash flows over 5 years with line-by-line expense modeling. Revenue is projected revenue growing from 10.9% to 11.1% 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 55, DPO 63, DIO 154). At a 7.4% WACC with mid-year discounting, the terminal value (87% of enterprise value) is derived by applying the industry peer median EV/EBITDA multiple of 16.4x to Year 6 EBITDA. After subtracting net debt, the equity value implies a fair price of $55.91 per share, suggesting BSX is overvalued by 21.1% at the current price of $70.88.
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 | 3,333 | 3,683 | 4,058 | 4,451 | 4,944 | 5,068 |
| (−) Net Interest | 559 | 618 | 681 | 747 | 830 | 850 |
| (+) D&A | 726 | 831 | 947 | 1,049 | 1,179 | 1,208 |
| EBITDA | 4,618 | 5,132 | 5,686 | 6,247 | 6,953 | 7,127 |
| (−) Tax | 637 | 705 | 776 | 851 | 946 | — |
| (−) CapEx | 1,077 | 1,191 | 1,312 | 1,439 | 1,598 | — |
| (−) ΔWC | 673 | 569 | 608 | 636 | 800 | — |
| Free Cash Flow (FCF) | 2,230 | 2,669 | 2,990 | 3,321 | 3,609 | — |
| Peers' EBITDA Multiple | 16.4x | |||||
| Terminal Value | 116,875 | |||||
| WACC / Discount Rate | 7.43% | |||||
| Timing of FCF (mid year) | 0.5 | 1.5 | 2.5 | 3.5 | 4.5 | 5 |
| Present Value of FCF | 2,152 | 2,397 | 2,500 | 2,584 | 2,614 | 81,670 |
| Enterprise Value | 93,916 | |||||
| Projection Period | 12,246 | 13.0% | ||||
| Terminal Value | 81,670 | 87.0% | ||||
| (−) Current Net Debt | 10,373 | |||||
| Equity Value | 83,543 | |||||
| (÷) Outstanding Shares | 1495M | |||||
| Fair Price | $56 | -21.1% | ||||
| WACC \ EV/EBITDA Exit Multiple | 12.4x | 14.4x | 16.4x | 18.4x | 20.4x |
|---|---|---|---|---|---|
| 5.4% | $47 | $54 | $62 | $69 | $76 |
| 6.4% | $45 | $52 | $59 | $66 | $73 |
| 7.4% | $43 | $49 | $56 | $63 | $69 |
| 8.4% | $41 | $47 | $53 | $60 | $66 |
| 9.4% | $39 | $45 | $51 | $57 | $63 |
Current price: $70.88. 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.