Using an unlevered Free Cash Flow to Firm (FCFF) model, we project Everest Re Group, Ltd.'s cash flows over 5 years with line-by-line expense modeling. Revenue is projected revenue growing from -2.1% to 11.2% 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 211, DPO 18, DIO 60). At a 7.3% WACC with mid-year discounting, the terminal value (90% 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 $1474.62 per share, suggesting EG is undervalued by 355.6% at the current price of $323.69.
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 | 2,426 | 2,363 | 2,532 | 2,816 | 3,131 | 3,209 |
| (−) Net Interest | 138 | 134 | 144 | 160 | 178 | 182 |
| (+) D&A | 0 | 169 | 335 | 512 | 708 | 726 |
| EBITDA | 2,564 | 2,667 | 3,011 | 3,487 | 4,017 | 4,118 |
| (−) Tax | 87 | 85 | 91 | 102 | 113 | — |
| (−) CapEx | 847 | 826 | 885 | 984 | 1,094 | — |
| (−) ΔWC | -121 | -295 | 797 | 1,335 | 1,485 | — |
| Free Cash Flow (FCF) | 1,749 | 2,051 | 1,238 | 1,067 | 1,326 | — |
| Peers' EBITDA Multiple | 19.7x | |||||
| Terminal Value | 81,200 | |||||
| WACC / Discount Rate | 7.34% | |||||
| Timing of FCF (mid year) | 0.5 | 1.5 | 2.5 | 3.5 | 4.5 | 5 |
| Present Value of FCF | 1,688 | 1,844 | 1,037 | 833 | 964 | 56,984 |
| Enterprise Value | 63,350 | |||||
| Projection Period | 6,366 | 10.0% | ||||
| Terminal Value | 56,984 | 90.0% | ||||
| (−) Current Net Debt | 2,271 | |||||
| Equity Value | 61,079 | |||||
| (÷) Outstanding Shares | 41M | |||||
| Fair Price | $1475 | +355.7% | ||||
| WACC \ EV/EBITDA Exit Multiple | 15.7x | 17.7x | 19.7x | 21.7x | 23.7x |
|---|---|---|---|---|---|
| 5.3% | $1310 | $1463 | $1617 | $1770 | $1923 |
| 6.3% | $1251 | $1397 | $1544 | $1690 | $1836 |
| 7.3% | $1196 | $1335 | $1475 | $1614 | $1754 |
| 8.3% | $1143 | $1276 | $1409 | $1543 | $1676 |
| 9.3% | $1093 | $1220 | $1347 | $1475 | $1602 |
Current price: $323.69. 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.