Using an unlevered Free Cash Flow to Firm (FCFF) model, we project EMCOR Group, Inc.'s cash flows over 5 years with line-by-line expense modeling. Revenue is projected revenue growing from 6.9% to 6.2% 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 94, DPO 32, DIO 3). At a 8.8% WACC with mid-year discounting, the terminal value (88% of enterprise value) is derived by applying the industry peer median EV/EBITDA multiple of 19.2x to Year 6 EBITDA. After subtracting net debt, the equity value implies a fair price of $593.78 per share, suggesting EME is overvalued by 19.2% at the current price of $734.70.
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 | 1,313 | 1,410 | 1,490 | 1,580 | 1,678 | 1,720 |
| (−) Net Interest | 12 | 13 | 14 | 15 | 16 | 16 |
| (+) D&A | 70 | 82 | 93 | 98 | 106 | 109 |
| EBITDA | 1,396 | 1,505 | 1,596 | 1,693 | 1,800 | 1,845 |
| (−) Tax | 366 | 392 | 415 | 440 | 467 | — |
| (−) CapEx | 95 | 102 | 108 | 114 | 121 | — |
| (−) ΔWC | 339 | 255 | 212 | 239 | 261 | — |
| Free Cash Flow (FCF) | 597 | 756 | 862 | 900 | 951 | — |
| Peers' EBITDA Multiple | 19.2x | |||||
| Terminal Value | 35,489 | |||||
| WACC / Discount Rate | 8.85% | |||||
| Timing of FCF (mid year) | 0.5 | 1.5 | 2.5 | 3.5 | 4.5 | 5 |
| Present Value of FCF | 572 | 666 | 697 | 669 | 650 | 23,228 |
| Enterprise Value | 26,482 | |||||
| Projection Period | 3,254 | 12.3% | ||||
| Terminal Value | 23,228 | 87.7% | ||||
| (−) Current Net Debt | (268) | |||||
| Equity Value | 26,750 | |||||
| (÷) Outstanding Shares | 45M | |||||
| Fair Price | $594 | -19.2% | ||||
| WACC \ EV/EBITDA Exit Multiple | 15.2x | 17.2x | 19.2x | 21.2x | 23.2x |
|---|---|---|---|---|---|
| 6.8% | $530 | $589 | $647 | $706 | $765 |
| 7.8% | $508 | $564 | $620 | $676 | $732 |
| 8.8% | $487 | $540 | $594 | $647 | $701 |
| 9.8% | $467 | $518 | $569 | $620 | $672 |
| 10.8% | $448 | $497 | $546 | $595 | $644 |
Current price: $734.70. 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.