Using an unlevered Free Cash Flow to Firm (FCFF) model, we project Dell Technologies Inc.'s cash flows over 5 years with line-by-line expense modeling. Revenue is projected revenue growing from 21.6% to 2.9% 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 66, DPO 110, DIO 29). At a 8.4% WACC with mid-year discounting, the terminal value (93% of enterprise value) is derived by applying the industry peer median EV/EBITDA multiple of 40.8x to Year 6 EBITDA. After subtracting net debt, the equity value implies a fair price of $670.44 per share, suggesting DELL is undervalued by 278.7% at the current price of $177.03.
Adjust parameters to explore scenarios. Changes are for exploration only and do not affect saved valuations.
| 2027 | 2028 | 2029 | 2030 | 2031 | Terminal | |
|---|---|---|---|---|---|---|
| Profit Before Tax | 6,733 | 7,454 | 7,897 | 9,376 | 9,649 | 9,891 |
| (−) Net Interest | 1,860 | 2,059 | 2,181 | 2,590 | 2,665 | 2,732 |
| (+) D&A | 2,768 | 2,977 | 3,227 | 3,577 | 4,117 | 4,220 |
| EBITDA | 11,361 | 12,490 | 13,305 | 15,543 | 16,432 | 16,842 |
| (−) Tax | 1,166 | 1,291 | 1,367 | 1,623 | 1,671 | — |
| (−) CapEx | 3,842 | 4,253 | 4,506 | 5,350 | 5,506 | — |
| (−) ΔWC | -1,791 | 113 | 70 | 233 | 43 | — |
| Free Cash Flow (FCF) | 8,144 | 6,833 | 7,362 | 8,337 | 9,212 | — |
| Peers' EBITDA Multiple | 40.8x | |||||
| Terminal Value | 686,326 | |||||
| WACC / Discount Rate | 8.42% | |||||
| Timing of FCF (mid year) | 0.5 | 1.5 | 2.5 | 3.5 | 4.5 | 5 |
| Present Value of FCF | 7,821 | 6,052 | 6,015 | 6,282 | 6,402 | 458,055 |
| Enterprise Value | 490,626 | |||||
| Projection Period | 32,572 | 6.6% | ||||
| Terminal Value | 458,055 | 93.4% | ||||
| (−) Current Net Debt | 19,975 | |||||
| Equity Value | 470,651 | |||||
| (÷) Outstanding Shares | 702M | |||||
| Fair Price | $670 | +278.7% | ||||
| WACC \ EV/EBITDA Exit Multiple | 36.7x | 38.7x | 40.7x | 42.7x | 44.7x |
|---|---|---|---|---|---|
| 6.4% | $666 | $701 | $736 | $771 | $807 |
| 7.4% | $635 | $669 | $702 | $736 | $770 |
| 8.4% | $606 | $638 | $670 | $702 | $734 |
| 9.4% | $579 | $610 | $640 | $671 | $701 |
| 10.4% | $553 | $582 | $611 | $641 | $670 |
Current price: $177.03. 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.