Using an unlevered Free Cash Flow to Firm (FCFF) model, we project Gen Digital Inc.'s cash flows over 5 years with line-by-line expense modeling. Revenue is projected revenue growing from 26.1% to 11.4% 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 20, DPO 47, DIO 60). At a 8.1% WACC with mid-year discounting, the terminal value (74% of enterprise value) is derived by applying the industry peer median EV/EBITDA multiple of 13.9x to Year 6 EBITDA. After subtracting net debt, the equity value implies a fair price of $48.98 per share, suggesting GEN is undervalued by 158.1% at the current price of $18.98.
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 | 1,547 | 1,635 | 1,737 | 1,936 | 2,158 | 2,212 |
| (−) Net Interest | 541 | 572 | 608 | 677 | 755 | 773 |
| (+) D&A | 11 | 12 | 14 | 17 | 17 | 17 |
| EBITDA | 2,099 | 2,219 | 2,359 | 2,630 | 2,929 | 3,002 |
| (−) Tax | 0 | 0 | 0 | 0 | 0 | — |
| (−) CapEx | 15 | 16 | 17 | 19 | 21 | — |
| (−) ΔWC | 134 | 17 | 20 | 39 | 43 | — |
| Free Cash Flow (FCF) | 1,950 | 2,186 | 2,322 | 2,572 | 2,864 | — |
| Peers' EBITDA Multiple | 13.9x | |||||
| Terminal Value | 41,637 | |||||
| WACC / Discount Rate | 8.13% | |||||
| Timing of FCF (mid year) | 0.5 | 1.5 | 2.5 | 3.5 | 4.5 | 5 |
| Present Value of FCF | 1,875 | 1,944 | 1,910 | 1,957 | 2,015 | 28,171 |
| Enterprise Value | 37,871 | |||||
| Projection Period | 9,700 | 25.6% | ||||
| Terminal Value | 28,171 | 74.4% | ||||
| (−) Current Net Debt | 7,309 | |||||
| Equity Value | 30,562 | |||||
| (÷) Outstanding Shares | 624M | |||||
| Fair Price | $49 | +158.1% | ||||
| WACC \ EV/EBITDA Exit Multiple | 9.9x | 11.9x | 13.9x | 15.9x | 17.9x |
|---|---|---|---|---|---|
| 6.1% | $40 | $47 | $54 | $61 | $68 |
| 7.1% | $38 | $45 | $51 | $58 | $65 |
| 8.1% | $36 | $42 | $49 | $55 | $62 |
| 9.1% | $34 | $40 | $47 | $53 | $59 |
| 10.1% | $32 | $38 | $44 | $50 | $56 |
Current price: $18.98. 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.