Using an unlevered Free Cash Flow to Firm (FCFF) model, we project Deckers Outdoor Corporation's cash flows over 5 years with line-by-line expense modeling. Revenue is projected revenue growing from 9.1% to 5.3% 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 33, DPO 70, DIO 98). At a 8.5% WACC with mid-year discounting, the terminal value (84% of enterprise value) is derived by applying the industry peer median EV/EBITDA multiple of 18.8x to Year 6 EBITDA. After subtracting net debt, the equity value implies a fair price of $150.42 per share, suggesting DECK is undervalued by 60.0% at the current price of $94.04.
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 | 1,046 | 1,119 | 1,197 | 1,231 | 1,295 | 1,328 |
| (−) Net Interest | 6 | 6 | 7 | 7 | 7 | 7 |
| (+) D&A | 68 | 81 | 92 | 98 | 103 | 105 |
| EBITDA | 1,119 | 1,206 | 1,296 | 1,335 | 1,405 | 1,440 |
| (−) Tax | 232 | 248 | 265 | 273 | 287 | — |
| (−) CapEx | 97 | 104 | 111 | 114 | 120 | — |
| (−) ΔWC | 217 | 48 | 52 | 22 | 42 | — |
| Free Cash Flow (FCF) | 574 | 806 | 867 | 926 | 955 | — |
| Peers' EBITDA Multiple | 18.8x | |||||
| Terminal Value | 27,101 | |||||
| WACC / Discount Rate | 8.50% | |||||
| Timing of FCF (mid year) | 0.5 | 1.5 | 2.5 | 3.5 | 4.5 | 5 |
| Present Value of FCF | 551 | 713 | 707 | 696 | 662 | 18,026 |
| Enterprise Value | 21,356 | |||||
| Projection Period | 3,330 | 15.6% | ||||
| Terminal Value | 18,026 | 84.4% | ||||
| (−) Current Net Debt | (1,612) | |||||
| Equity Value | 22,968 | |||||
| (÷) Outstanding Shares | 153M | |||||
| Fair Price | $150 | +60.0% | ||||
| WACC \ EV/EBITDA Exit Multiple | 14.8x | 16.8x | 18.8x | 20.8x | 22.8x |
|---|---|---|---|---|---|
| 6.5% | $135 | $149 | $163 | $177 | $191 |
| 7.5% | $130 | $143 | $157 | $170 | $183 |
| 8.5% | $125 | $138 | $150 | $163 | $176 |
| 9.5% | $121 | $133 | $145 | $157 | $169 |
| 10.5% | $116 | $128 | $139 | $151 | $162 |
Current price: $94.04. 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.