Using an unlevered Free Cash Flow to Firm (FCFF) model, we project Edwards Lifesciences Corporation's cash flows over 5 years with line-by-line expense modeling. Revenue is projected revenue growing from 10.1% to 8.9% 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 52, DPO 63, DIO 295). At a 7.8% WACC with mid-year discounting, the terminal value (84% 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 $83.35 per share, suggesting EW is fairly valued by 1.0% at the current price of $82.52.
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 | 1,903 | 2,090 | 2,298 | 2,531 | 2,756 | 2,825 |
| (−) Net Interest | 22 | 25 | 27 | 30 | 32 | 33 |
| (+) D&A | 275 | 277 | 299 | 327 | 368 | 377 |
| EBITDA | 2,200 | 2,391 | 2,623 | 2,888 | 3,156 | 3,235 |
| (−) Tax | 242 | 266 | 292 | 322 | 350 | — |
| (−) CapEx | 340 | 374 | 411 | 453 | 493 | — |
| (−) ΔWC | 60 | 184 | 204 | 229 | 222 | — |
| Free Cash Flow (FCF) | 1,557 | 1,568 | 1,716 | 1,885 | 2,091 | — |
| Peers' EBITDA Multiple | 17.7x | |||||
| Terminal Value | 57,289 | |||||
| WACC / Discount Rate | 7.81% | |||||
| Timing of FCF (mid year) | 0.5 | 1.5 | 2.5 | 3.5 | 4.5 | 5 |
| Present Value of FCF | 1,500 | 1,401 | 1,422 | 1,448 | 1,491 | 39,330 |
| Enterprise Value | 46,592 | |||||
| Projection Period | 7,262 | 15.6% | ||||
| Terminal Value | 39,330 | 84.4% | ||||
| (−) Current Net Debt | (2,233) | |||||
| Equity Value | 48,825 | |||||
| (÷) Outstanding Shares | 586M | |||||
| Fair Price | $83 | +1.0% | ||||
| WACC \ EV/EBITDA Exit Multiple | 13.7x | 15.7x | 17.7x | 19.7x | 21.7x |
|---|---|---|---|---|---|
| 5.8% | $74 | $82 | $91 | $99 | $107 |
| 6.8% | $71 | $79 | $87 | $95 | $103 |
| 7.8% | $68 | $76 | $83 | $91 | $99 |
| 8.8% | $66 | $73 | $80 | $87 | $95 |
| 9.8% | $63 | $70 | $77 | $84 | $91 |
Current price: $82.52. 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.