Using an unlevered Free Cash Flow to Firm (FCFF) model, we project Globe Life Inc.'s cash flows over 5 years with line-by-line expense modeling. Revenue is projected revenue growing from 6.6% to 4.0% 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 59, DPO 49, DIO 60). At a 7.6% WACC with mid-year discounting, the terminal value (72% of enterprise value) is derived by applying the industry peer median EV/EBITDA multiple of 9.5x to Year 6 EBITDA. After subtracting net debt, the equity value implies a fair price of $216.45 per share, suggesting GL is undervalued by 56.4% at the current price of $138.36.
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 | 1,537 | 1,625 | 1,738 | 1,826 | 1,899 | 1,947 |
| (−) Net Interest | 125 | 132 | 142 | 149 | 155 | 159 |
| (+) D&A | 66 | 73 | 83 | 90 | 93 | 96 |
| EBITDA | 1,728 | 1,830 | 1,962 | 2,064 | 2,147 | 2,201 |
| (−) Tax | 293 | 310 | 331 | 348 | 362 | — |
| (−) CapEx | 74 | 78 | 84 | 88 | 92 | — |
| (−) ΔWC | 665 | 67 | 85 | 67 | 56 | — |
| Free Cash Flow (FCF) | 696 | 1,376 | 1,462 | 1,562 | 1,638 | — |
| Peers' EBITDA Multiple | 9.5x | |||||
| Terminal Value | 20,908 | |||||
| WACC / Discount Rate | 7.62% | |||||
| Timing of FCF (mid year) | 0.5 | 1.5 | 2.5 | 3.5 | 4.5 | 5 |
| Present Value of FCF | 671 | 1,232 | 1,217 | 1,208 | 1,177 | 14,483 |
| Enterprise Value | 19,988 | |||||
| Projection Period | 5,505 | 27.5% | ||||
| Terminal Value | 14,483 | 72.5% | ||||
| (−) Current Net Debt | 2,481 | |||||
| Equity Value | 17,507 | |||||
| (÷) Outstanding Shares | 81M | |||||
| Fair Price | $217 | +56.5% | ||||
| WACC \ EV/EBITDA Exit Multiple | 5.5x | 7.5x | 9.5x | 11.5x | 13.5x |
|---|---|---|---|---|---|
| 5.6% | $155 | $196 | $238 | $279 | $320 |
| 6.6% | $148 | $187 | $227 | $266 | $306 |
| 7.6% | $141 | $179 | $216 | $254 | $292 |
| 8.6% | $135 | $171 | $207 | $243 | $279 |
| 9.6% | $129 | $163 | $197 | $232 | $266 |
Current price: $138.36. 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.