Using an unlevered Free Cash Flow to Firm (FCFF) model, we project Elevance Health Inc.'s cash flows over 5 years with line-by-line expense modeling. Revenue is projected revenue growing from -3.1% to 7.2% 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 27, DPO 46, DIO 60). At a 6.9% WACC with mid-year discounting, the terminal value (81% of enterprise value) is derived by applying the industry peer median EV/EBITDA multiple of 14.5x to Year 6 EBITDA. After subtracting net debt, the equity value implies a fair price of $2882.34 per share, suggesting ELV is undervalued by 877.1% at the current price of $294.99.
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 | 40,222 | 41,074 | 43,410 | 44,643 | 47,843 | 49,039 |
| (−) Net Interest | 1,194 | 1,219 | 1,289 | 1,325 | 1,420 | 1,456 |
| (+) D&A | 1,181 | 1,238 | 1,287 | 1,323 | 1,376 | 1,410 |
| EBITDA | 42,597 | 43,531 | 45,985 | 47,292 | 50,639 | 51,905 |
| (−) Tax | 8,692 | 8,876 | 9,381 | 9,648 | 10,339 | — |
| (−) CapEx | 1,369 | 1,398 | 1,477 | 1,519 | 1,628 | — |
| (−) ΔWC | 21,564 | 418 | 1,145 | 605 | 1,568 | — |
| Free Cash Flow (FCF) | 10,973 | 32,839 | 33,982 | 35,520 | 37,104 | — |
| Peers' EBITDA Multiple | 14.5x | |||||
| Terminal Value | 753,148 | |||||
| WACC / Discount Rate | 6.94% | |||||
| Timing of FCF (mid year) | 0.5 | 1.5 | 2.5 | 3.5 | 4.5 | 5 |
| Present Value of FCF | 10,611 | 29,697 | 28,737 | 28,089 | 27,438 | 538,590 |
| Enterprise Value | 663,162 | |||||
| Projection Period | 124,572 | 18.8% | ||||
| Terminal Value | 538,590 | 81.2% | ||||
| (−) Current Net Debt | 23,744 | |||||
| Equity Value | 639,418 | |||||
| (÷) Outstanding Shares | 222M | |||||
| Fair Price | $2883 | +877.3% | ||||
| WACC \ EV/EBITDA Exit Multiple | 10.5x | 12.5x | 14.5x | 16.5x | 18.5x |
|---|---|---|---|---|---|
| 4.9% | $2417 | $2785 | $3153 | $3521 | $3889 |
| 5.9% | $2312 | $2663 | $3014 | $3365 | $3715 |
| 6.9% | $2213 | $2548 | $2882 | $3217 | $3552 |
| 7.9% | $2119 | $2438 | $2758 | $3077 | $3397 |
| 8.9% | $2030 | $2335 | $2640 | $2945 | $3250 |
Current price: $294.99. 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.