Using an unlevered Free Cash Flow to Firm (FCFF) model, we project CDW Corporation's cash flows over 5 years with line-by-line expense modeling. Revenue is projected revenue growing from 2.9% to 1.9% 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 92, DPO 69, DIO 15). At a 8.1% WACC with mid-year discounting, the terminal value (74% of enterprise value) is derived by applying the industry peer median EV/EBITDA multiple of 10.7x to Year 6 EBITDA. After subtracting net debt, the equity value implies a fair price of $122.48 per share, suggesting CDW is fairly valued by 0.8% at the current price of $121.52.
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 | 1,502 | 1,560 | 1,619 | 1,761 | 1,794 | 1,839 |
| (−) Net Interest | 222 | 231 | 239 | 260 | 265 | 272 |
| (+) D&A | 123 | 129 | 131 | 129 | 135 | 138 |
| EBITDA | 1,847 | 1,920 | 1,989 | 2,151 | 2,194 | 2,249 |
| (−) Tax | 369 | 384 | 398 | 433 | 441 | — |
| (−) CapEx | 130 | 135 | 140 | 152 | 155 | — |
| (−) ΔWC | -109 | 120 | 122 | 293 | 68 | — |
| Free Cash Flow (FCF) | 1,456 | 1,281 | 1,328 | 1,272 | 1,530 | — |
| Peers' EBITDA Multiple | 10.7x | |||||
| Terminal Value | 23,977 | |||||
| WACC / Discount Rate | 8.14% | |||||
| Timing of FCF (mid year) | 0.5 | 1.5 | 2.5 | 3.5 | 4.5 | 5 |
| Present Value of FCF | 1,401 | 1,139 | 1,092 | 967 | 1,076 | 16,213 |
| Enterprise Value | 21,888 | |||||
| Projection Period | 5,675 | 25.9% | ||||
| Terminal Value | 16,213 | 74.1% | ||||
| (−) Current Net Debt | 5,712 | |||||
| Equity Value | 16,176 | |||||
| (÷) Outstanding Shares | 132M | |||||
| Fair Price | $122 | +0.8% | ||||
| WACC \ EV/EBITDA Exit Multiple | 6.7x | 8.7x | 10.7x | 12.7x | 14.7x |
|---|---|---|---|---|---|
| 6.1% | $86 | $111 | $136 | $162 | $187 |
| 7.1% | $81 | $105 | $129 | $153 | $178 |
| 8.1% | $76 | $99 | $122 | $146 | $169 |
| 9.1% | $72 | $94 | $116 | $138 | $160 |
| 10.1% | $68 | $89 | $110 | $131 | $152 |
Current price: $121.52. 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.