Using an unlevered Free Cash Flow to Firm (FCFF) model, we project Global Payments Inc.'s cash flows over 5 years with line-by-line expense modeling. Revenue is projected revenue growing from 62.6% to 9.0% 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 40, DPO 113, DIO 60). At a 6.6% WACC with mid-year discounting, the terminal value (88% of enterprise value) is derived by applying the industry peer median EV/EBITDA multiple of 16.4x to Year 6 EBITDA. After subtracting net debt, the equity value implies a fair price of $191.36 per share, suggesting GPN is undervalued by 171.8% at the current price of $70.42.
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 | 1,925 | 2,036 | 2,170 | 2,249 | 2,451 | 2,512 |
| (−) Net Interest | 764 | 807 | 861 | 892 | 972 | 996 |
| (+) D&A | 612 | 685 | 742 | 804 | 869 | 891 |
| EBITDA | 3,301 | 3,528 | 3,774 | 3,944 | 4,291 | 4,399 |
| (−) Tax | 457 | 483 | 515 | 534 | 582 | — |
| (−) CapEx | 856 | 905 | 965 | 1,000 | 1,090 | — |
| (−) ΔWC | 2,559 | 39 | 48 | 28 | 72 | — |
| Free Cash Flow (FCF) | -572 | 2,100 | 2,245 | 2,383 | 2,548 | — |
| Peers' EBITDA Multiple | 16.4x | |||||
| Terminal Value | 72,182 | |||||
| WACC / Discount Rate | 6.64% | |||||
| Timing of FCF (mid year) | 0.5 | 1.5 | 2.5 | 3.5 | 4.5 | 5 |
| Present Value of FCF | -554 | 1,907 | 1,912 | 1,903 | 1,908 | 52,348 |
| Enterprise Value | 59,424 | |||||
| Projection Period | 7,076 | 11.9% | ||||
| Terminal Value | 52,348 | 88.1% | ||||
| (−) Current Net Debt | 13,471 | |||||
| Equity Value | 45,953 | |||||
| (÷) Outstanding Shares | 240M | |||||
| Fair Price | $191 | +171.7% | ||||
| WACC \ EV/EBITDA Exit Multiple | 12.4x | 14.4x | 16.4x | 18.4x | 20.4x |
|---|---|---|---|---|---|
| 4.6% | $156 | $186 | $215 | $244 | $273 |
| 5.6% | $147 | $175 | $203 | $231 | $258 |
| 6.6% | $138 | $165 | $191 | $218 | $244 |
| 7.6% | $130 | $155 | $181 | $206 | $231 |
| 8.6% | $122 | $146 | $170 | $195 | $219 |
Current price: $70.42. 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.