Using an unlevered Free Cash Flow to Firm (FCFF) model, we project DexCom, Inc.'s cash flows over 5 years with line-by-line expense modeling. Revenue is projected revenue growing from 12.2% to 14.0% 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 93, DPO 79, DIO 136). At a 7.7% WACC with mid-year discounting, the terminal value (94% of enterprise value) is derived by applying the industry peer median EV/EBITDA multiple of 17.7x to Year 6 EBITDA. After subtracting net debt, the equity value implies a fair price of $59.96 per share, suggesting DXCM is fairly valued by 9.8% at the current price of $66.50.
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 | 761 | 855 | 955 | 1,077 | 1,228 | 1,259 |
| (−) Net Interest | 26 | 29 | 32 | 36 | 41 | 42 |
| (+) D&A | 343 | 373 | 421 | 509 | 591 | 605 |
| EBITDA | 1,129 | 1,256 | 1,408 | 1,623 | 1,860 | 1,907 |
| (−) Tax | 143 | 161 | 179 | 202 | 231 | — |
| (−) CapEx | 540 | 607 | 678 | 765 | 872 | — |
| (−) ΔWC | 56 | 200 | 215 | 262 | 324 | — |
| Free Cash Flow (FCF) | 390 | 289 | 336 | 394 | 434 | — |
| Peers' EBITDA Multiple | 17.7x | |||||
| Terminal Value | 33,767 | |||||
| WACC / Discount Rate | 7.74% | |||||
| Timing of FCF (mid year) | 0.5 | 1.5 | 2.5 | 3.5 | 4.5 | 5 |
| Present Value of FCF | 376 | 258 | 279 | 304 | 310 | 23,260 |
| Enterprise Value | 24,787 | |||||
| Projection Period | 1,527 | 6.2% | ||||
| Terminal Value | 23,260 | 93.8% | ||||
| (−) Current Net Debt | 472 | |||||
| Equity Value | 24,315 | |||||
| (÷) Outstanding Shares | 406M | |||||
| Fair Price | $60 | -9.8% | ||||
| WACC \ EV/EBITDA Exit Multiple | 13.7x | 15.7x | 17.7x | 19.7x | 21.7x |
|---|---|---|---|---|---|
| 5.7% | $52 | $59 | $66 | $73 | $80 |
| 6.7% | $49 | $56 | $63 | $70 | $76 |
| 7.7% | $47 | $53 | $60 | $66 | $73 |
| 8.7% | $45 | $51 | $57 | $63 | $70 |
| 9.7% | $43 | $49 | $55 | $61 | $67 |
Current price: $66.50. 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.