Using an unlevered Free Cash Flow to Firm (FCFF) model, we project Coterra Energy Inc.'s cash flows over 5 years with line-by-line expense modeling. Revenue is projected revenue growing from 187.6% 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 84, DPO 76, DIO 8). At a 7.3% WACC with mid-year discounting, the terminal value (83% of enterprise value) is derived by applying the industry peer median EV/EBITDA multiple of 7.5x to Year 6 EBITDA. After subtracting net debt, the equity value implies a fair price of $58.20 per share, suggesting CTRA is undervalued by 62.5% at the current price of $35.81.
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 | 3,309 | 3,497 | 3,700 | 3,918 | 3,993 | 4,093 |
| (−) Net Interest | 207 | 219 | 232 | 246 | 250 | 257 |
| (+) D&A | 1,739 | 2,207 | 2,514 | 2,781 | 3,153 | 3,232 |
| EBITDA | 5,255 | 5,924 | 6,446 | 6,944 | 7,397 | 7,582 |
| (−) Tax | 719 | 760 | 804 | 852 | 868 | — |
| (−) CapEx | 3,069 | 3,244 | 3,432 | 3,634 | 3,704 | — |
| (−) ΔWC | 660 | 62 | 66 | 72 | 25 | — |
| Free Cash Flow (FCF) | 807 | 1,858 | 2,143 | 2,387 | 2,800 | — |
| Peers' EBITDA Multiple | 7.5x | |||||
| Terminal Value | 56,939 | |||||
| WACC / Discount Rate | 7.30% | |||||
| Timing of FCF (mid year) | 0.5 | 1.5 | 2.5 | 3.5 | 4.5 | 5 |
| Present Value of FCF | 779 | 1,672 | 1,797 | 1,865 | 2,040 | 40,039 |
| Enterprise Value | 48,192 | |||||
| Projection Period | 8,153 | 16.9% | ||||
| Terminal Value | 40,039 | 83.1% | ||||
| (−) Current Net Debt | 3,887 | |||||
| Equity Value | 44,305 | |||||
| (÷) Outstanding Shares | 761M | |||||
| Fair Price | $58 | +62.6% | ||||
| WACC \ EV/EBITDA Exit Multiple | 3.5x | 5.5x | 7.5x | 9.5x | 11.5x |
|---|---|---|---|---|---|
| 5.3% | $33 | $49 | $64 | $79 | $95 |
| 6.3% | $32 | $46 | $61 | $76 | $90 |
| 7.3% | $30 | $44 | $58 | $72 | $86 |
| 8.3% | $29 | $42 | $56 | $69 | $82 |
| 9.3% | $27 | $40 | $53 | $66 | $79 |
Current price: $35.81. 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.