Using an unlevered Free Cash Flow to Firm (FCFF) model, we project FactSet Research Systems Inc.'s cash flows over 5 years with line-by-line expense modeling. Revenue is projected revenue growing from 5.5% to 6.3% 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 39, DPO 48, DIO 6). At a 7.4% WACC with mid-year discounting, the terminal value (83% of enterprise value) is derived by applying the industry peer median EV/EBITDA multiple of 18.5x to Year 6 EBITDA. After subtracting net debt, the equity value implies a fair price of $295.71 per share, suggesting FDS is undervalued by 50.3% at the current price of $196.72.
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 | 504 | 531 | 562 | 584 | 621 | 636 |
| (−) Net Interest | 54 | 57 | 60 | 63 | 67 | 68 |
| (+) D&A | 74 | 79 | 88 | 95 | 99 | 101 |
| EBITDA | 632 | 667 | 709 | 742 | 786 | 806 |
| (−) Tax | 80 | 85 | 90 | 93 | 99 | — |
| (−) CapEx | 89 | 93 | 99 | 103 | 109 | — |
| (−) ΔWC | -7 | 7 | 8 | 6 | 9 | — |
| Free Cash Flow (FCF) | 470 | 482 | 513 | 540 | 568 | — |
| Peers' EBITDA Multiple | 18.5x | |||||
| Terminal Value | 14,919 | |||||
| WACC / Discount Rate | 7.43% | |||||
| Timing of FCF (mid year) | 0.5 | 1.5 | 2.5 | 3.5 | 4.5 | 5 |
| Present Value of FCF | 453 | 433 | 429 | 420 | 412 | 10,426 |
| Enterprise Value | 12,572 | |||||
| Projection Period | 2,146 | 17.1% | ||||
| Terminal Value | 10,426 | 82.9% | ||||
| (−) Current Net Debt | 1,221 | |||||
| Equity Value | 11,351 | |||||
| (÷) Outstanding Shares | 38M | |||||
| Fair Price | $296 | +50.3% | ||||
| WACC \ EV/EBITDA Exit Multiple | 14.5x | 16.5x | 18.5x | 20.5x | 22.5x |
|---|---|---|---|---|---|
| 5.4% | $261 | $293 | $325 | $357 | $390 |
| 6.4% | $249 | $279 | $310 | $341 | $371 |
| 7.4% | $237 | $266 | $296 | $325 | $354 |
| 8.4% | $226 | $254 | $282 | $310 | $338 |
| 9.4% | $216 | $243 | $269 | $296 | $323 |
Current price: $196.72. 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.