Using an unlevered Free Cash Flow to Firm (FCFF) model, we project Domino's Pizza, Inc.'s cash flows over 5 years with line-by-line expense modeling. Revenue is projected revenue growing from 7.0% to 4.7% 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 23, DPO 13, DIO 10). At a 7.5% WACC with mid-year discounting, the terminal value (83% of enterprise value) is derived by applying the industry peer median EV/EBITDA multiple of 19.7x to Year 6 EBITDA. After subtracting net debt, the equity value implies a fair price of $478.89 per share, suggesting DPZ is undervalued by 32.1% at the current price of $362.53.
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 | 733 | 762 | 797 | 828 | 867 | 888 |
| (−) Net Interest | 225 | 234 | 245 | 254 | 266 | 273 |
| (+) D&A | 104 | 109 | 116 | 121 | 126 | 129 |
| EBITDA | 1,062 | 1,105 | 1,158 | 1,203 | 1,258 | 1,290 |
| (−) Tax | 148 | 154 | 161 | 167 | 175 | — |
| (−) CapEx | 119 | 124 | 130 | 135 | 141 | — |
| (−) ΔWC | 28 | 12 | 15 | 13 | 16 | — |
| Free Cash Flow (FCF) | 767 | 815 | 853 | 889 | 926 | — |
| Peers' EBITDA Multiple | 19.7x | |||||
| Terminal Value | 25,386 | |||||
| WACC / Discount Rate | 7.53% | |||||
| Timing of FCF (mid year) | 0.5 | 1.5 | 2.5 | 3.5 | 4.5 | 5 |
| Present Value of FCF | 739 | 731 | 711 | 689 | 668 | 17,655 |
| Enterprise Value | 21,194 | |||||
| Projection Period | 3,539 | 16.7% | ||||
| Terminal Value | 17,655 | 83.3% | ||||
| (−) Current Net Debt | 4,798 | |||||
| Equity Value | 16,396 | |||||
| (÷) Outstanding Shares | 34M | |||||
| Fair Price | $479 | +32.1% | ||||
| WACC \ EV/EBITDA Exit Multiple | 15.7x | 17.7x | 19.7x | 21.7x | 23.7x |
|---|---|---|---|---|---|
| 5.5% | $419 | $477 | $535 | $592 | $650 |
| 6.5% | $396 | $451 | $506 | $561 | $616 |
| 7.5% | $374 | $426 | $479 | $531 | $584 |
| 8.5% | $353 | $403 | $453 | $503 | $553 |
| 9.5% | $333 | $381 | $429 | $477 | $525 |
Current price: $362.53. 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.