Using an unlevered Free Cash Flow to Firm (FCFF) model, we project Dollar General Corporation's cash flows over 5 years with line-by-line expense modeling. Revenue is projected revenue growing from 5.7% to 3.3% 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 1, DPO 51, DIO 88). At a 5.1% WACC with mid-year discounting, the terminal value (85% of enterprise value) is derived by applying the industry peer median EV/EBITDA multiple of 13.3x to Year 6 EBITDA. After subtracting net debt, the equity value implies a fair price of $213.41 per share, suggesting DG is undervalued by 78.4% at the current price of $119.62.
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 | 2,786 | 2,741 | 2,856 | 2,975 | 3,074 | 3,151 |
| (−) Net Interest | 278 | 274 | 285 | 297 | 307 | 314 |
| (+) D&A | 1,376 | 1,483 | 1,487 | 1,476 | 1,557 | 1,596 |
| EBITDA | 4,441 | 4,498 | 4,628 | 4,749 | 4,938 | 5,062 |
| (−) Tax | 617 | 607 | 632 | 658 | 680 | — |
| (−) CapEx | 1,606 | 1,580 | 1,646 | 1,715 | 1,772 | — |
| (−) ΔWC | 1,000 | -53 | 136 | 141 | 117 | — |
| Free Cash Flow (FCF) | 1,218 | 2,365 | 2,215 | 2,234 | 2,369 | — |
| Peers' EBITDA Multiple | 13.3x | |||||
| Terminal Value | 67,321 | |||||
| WACC / Discount Rate | 5.06% | |||||
| Timing of FCF (mid year) | 0.5 | 1.5 | 2.5 | 3.5 | 4.5 | 5 |
| Present Value of FCF | 1,189 | 2,196 | 1,958 | 1,880 | 1,897 | 52,597 |
| Enterprise Value | 61,717 | |||||
| Projection Period | 9,120 | 14.8% | ||||
| Terminal Value | 52,597 | 85.2% | ||||
| (−) Current Net Debt | 14,580 | |||||
| Equity Value | 47,137 | |||||
| (÷) Outstanding Shares | 221M | |||||
| Fair Price | $213 | +78.5% | ||||
| WACC \ EV/EBITDA Exit Multiple | 9.3x | 11.3x | 13.3x | 15.3x | 17.3x |
|---|---|---|---|---|---|
| 3.1% | $161 | $200 | $240 | $279 | $318 |
| 4.1% | $151 | $189 | $226 | $264 | $301 |
| 5.1% | $142 | $178 | $213 | $249 | $285 |
| 6.1% | $133 | $167 | $201 | $236 | $270 |
| 7.1% | $125 | $157 | $190 | $223 | $255 |
Current price: $119.62. 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.