Using an unlevered Free Cash Flow to Firm (FCFF) model, we project Cintas Corporation's cash flows over 5 years with line-by-line expense modeling. Revenue is projected revenue growing from 8.4% to 6.3% 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 48, DPO 25, DIO 38). At a 8.8% WACC with mid-year discounting, the terminal value (84% of enterprise value) is derived by applying the industry peer median EV/EBITDA multiple of 18.0x to Year 6 EBITDA. After subtracting net debt, the equity value implies a fair price of $113.43 per share, suggesting CTAS is overvalued by 33.3% at the current price of $170.08.
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 | 2,180 | 2,340 | 2,503 | 2,642 | 2,808 | 2,878 |
| (−) Net Interest | 130 | 140 | 149 | 158 | 168 | 172 |
| (+) D&A | 307 | 354 | 388 | 410 | 421 | 431 |
| EBITDA | 2,616 | 2,834 | 3,041 | 3,210 | 3,396 | 3,481 |
| (−) Tax | 401 | 431 | 461 | 486 | 517 | — |
| (−) CapEx | 382 | 410 | 439 | 463 | 493 | — |
| (−) ΔWC | 303 | 124 | 126 | 107 | 128 | — |
| Free Cash Flow (FCF) | 1,530 | 1,869 | 2,015 | 2,153 | 2,259 | — |
| Peers' EBITDA Multiple | 18.0x | |||||
| Terminal Value | 62,524 | |||||
| WACC / Discount Rate | 8.78% | |||||
| Timing of FCF (mid year) | 0.5 | 1.5 | 2.5 | 3.5 | 4.5 | 5 |
| Present Value of FCF | 1,467 | 1,648 | 1,633 | 1,603 | 1,547 | 41,041 |
| Enterprise Value | 48,939 | |||||
| Projection Period | 7,898 | 16.1% | ||||
| Terminal Value | 41,041 | 83.9% | ||||
| (−) Current Net Debt | 2,391 | |||||
| Equity Value | 46,548 | |||||
| (÷) Outstanding Shares | 410M | |||||
| Fair Price | $113 | -33.3% | ||||
| WACC \ EV/EBITDA Exit Multiple | 14.0x | 16.0x | 18.0x | 20.0x | 22.0x |
|---|---|---|---|---|---|
| 6.8% | $100 | $112 | $124 | $136 | $149 |
| 7.8% | $95 | $107 | $119 | $130 | $142 |
| 8.8% | $91 | $102 | $113 | $125 | $136 |
| 9.8% | $87 | $98 | $109 | $119 | $130 |
| 10.8% | $84 | $94 | $104 | $114 | $124 |
Current price: $170.08. 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.