Using an unlevered Free Cash Flow to Firm (FCFF) model, we project GE HealthCare Technologies Inc.'s cash flows over 5 years with line-by-line expense modeling. Revenue is projected revenue growing from 5.1% to 4.1% 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 78, DPO 96, DIO 66). At a 7.2% WACC with mid-year discounting, the terminal value (84% of enterprise value) is derived by applying the industry peer median EV/EBITDA multiple of 17.2x to Year 6 EBITDA. After subtracting net debt, the equity value implies a fair price of $119.92 per share, suggesting GEHC is undervalued by 66.3% at the current price of $72.13.
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 | 2,628 | 2,749 | 2,886 | 3,090 | 3,216 | 3,296 |
| (−) Net Interest | 356 | 373 | 391 | 419 | 436 | 447 |
| (+) D&A | 366 | 398 | 422 | 434 | 451 | 462 |
| EBITDA | 3,350 | 3,520 | 3,699 | 3,943 | 4,102 | 4,205 |
| (−) Tax | 618 | 646 | 678 | 726 | 756 | — |
| (−) CapEx | 410 | 429 | 450 | 482 | 502 | — |
| (−) ΔWC | 632 | 165 | 186 | 277 | 171 | — |
| Free Cash Flow (FCF) | 1,690 | 2,280 | 2,384 | 2,458 | 2,674 | — |
| Peers' EBITDA Multiple | 17.2x | |||||
| Terminal Value | 72,239 | |||||
| WACC / Discount Rate | 7.17% | |||||
| Timing of FCF (mid year) | 0.5 | 1.5 | 2.5 | 3.5 | 4.5 | 5 |
| Present Value of FCF | 1,633 | 2,055 | 2,005 | 1,929 | 1,958 | 51,098 |
| Enterprise Value | 60,678 | |||||
| Projection Period | 9,580 | 15.8% | ||||
| Terminal Value | 51,098 | 84.2% | ||||
| (−) Current Net Debt | 5,491 | |||||
| Equity Value | 55,187 | |||||
| (÷) Outstanding Shares | 460M | |||||
| Fair Price | $120 | +66.2% | ||||
| WACC \ EV/EBITDA Exit Multiple | 13.2x | 15.2x | 17.2x | 19.2x | 21.2x |
|---|---|---|---|---|---|
| 5.2% | $104 | $118 | $132 | $146 | $160 |
| 6.2% | $99 | $112 | $126 | $139 | $153 |
| 7.2% | $94 | $107 | $120 | $133 | $146 |
| 8.2% | $90 | $102 | $114 | $127 | $139 |
| 9.2% | $86 | $97 | $109 | $121 | $133 |
Current price: $72.13. 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.