Using an unlevered Free Cash Flow to Firm (FCFF) model, we project Garmin Ltd.'s cash flows over 5 years with line-by-line expense modeling. Revenue is projected revenue growing from 10.2% to 9.8% 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 58, DPO 47, DIO 226). At a 9.3% WACC with mid-year discounting, the terminal value (90% of enterprise value) is derived by applying the industry peer median EV/EBITDA multiple of 27.6x to Year 6 EBITDA. After subtracting net debt, the equity value implies a fair price of $344.64 per share, suggesting GRMN is undervalued by 45.5% at the current price of $236.82.
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 | 1,720 | 1,882 | 2,138 | 2,348 | 2,578 | 2,643 |
| (−) Net Interest | 160 | 175 | 199 | 218 | 239 | 245 |
| (+) D&A | 243 | 251 | 278 | 325 | 382 | 391 |
| EBITDA | 2,123 | 2,307 | 2,615 | 2,891 | 3,200 | 3,280 |
| (−) Tax | 157 | 172 | 195 | 214 | 235 | — |
| (−) CapEx | 348 | 381 | 433 | 476 | 522 | — |
| (−) ΔWC | 231 | 273 | 433 | 355 | 390 | — |
| Free Cash Flow (FCF) | 1,386 | 1,481 | 1,553 | 1,847 | 2,053 | — |
| Peers' EBITDA Multiple | 27.6x | |||||
| Terminal Value | 90,519 | |||||
| WACC / Discount Rate | 9.30% | |||||
| Timing of FCF (mid year) | 0.5 | 1.5 | 2.5 | 3.5 | 4.5 | 5 |
| Present Value of FCF | 1,326 | 1,296 | 1,243 | 1,353 | 1,376 | 58,028 |
| Enterprise Value | 64,622 | |||||
| Projection Period | 6,594 | 10.2% | ||||
| Terminal Value | 58,028 | 89.8% | ||||
| (−) Current Net Debt | (2,114) | |||||
| Equity Value | 66,736 | |||||
| (÷) Outstanding Shares | 194M | |||||
| Fair Price | $345 | +45.5% | ||||
| WACC \ EV/EBITDA Exit Multiple | 23.6x | 25.6x | 27.6x | 29.6x | 31.6x |
|---|---|---|---|---|---|
| 7.3% | $328 | $351 | $375 | $399 | $423 |
| 8.3% | $314 | $337 | $360 | $382 | $405 |
| 9.3% | $301 | $323 | $345 | $366 | $388 |
| 10.3% | $289 | $310 | $331 | $351 | $372 |
| 11.3% | $277 | $297 | $317 | $337 | $357 |
Current price: $236.82. 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.