Using an unlevered Free Cash Flow to Firm (FCFF) model, we project Hilton Worldwide Holdings Inc.'s cash flows over 5 years with line-by-line expense modeling. Revenue is projected revenue growing from 8.7% to 8.1% 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 56, DPO 22, DIO 60). At a 7.9% WACC with mid-year discounting, the terminal value (86% of enterprise value) is derived by applying the industry peer median EV/EBITDA multiple of 19.8x to Year 6 EBITDA. After subtracting net debt, the equity value implies a fair price of $276.10 per share, suggesting HLT is fairly valued by 8.9% at the current price of $303.21.
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 | 2,823 | 3,053 | 3,276 | 3,570 | 3,860 | 3,957 |
| (−) Net Interest | 690 | 746 | 801 | 873 | 944 | 967 |
| (+) D&A | 145 | 169 | 191 | 188 | 198 | 203 |
| EBITDA | 3,659 | 3,968 | 4,268 | 4,631 | 5,002 | 5,127 |
| (−) Tax | 735 | 795 | 853 | 929 | 1,005 | — |
| (−) CapEx | 198 | 214 | 229 | 250 | 270 | — |
| (−) ΔWC | 1,254 | 239 | 233 | 307 | 302 | — |
| Free Cash Flow (FCF) | 1,472 | 2,720 | 2,953 | 3,145 | 3,424 | — |
| Peers' EBITDA Multiple | 19.8x | |||||
| Terminal Value | 101,312 | |||||
| WACC / Discount Rate | 7.89% | |||||
| Timing of FCF (mid year) | 0.5 | 1.5 | 2.5 | 3.5 | 4.5 | 5 |
| Present Value of FCF | 1,417 | 2,427 | 2,442 | 2,410 | 2,433 | 69,295 |
| Enterprise Value | 80,425 | |||||
| Projection Period | 11,130 | 13.8% | ||||
| Terminal Value | 69,295 | 86.2% | ||||
| (−) Current Net Debt | 14,699 | |||||
| Equity Value | 65,726 | |||||
| (÷) Outstanding Shares | 238M | |||||
| Fair Price | $276 | -8.9% | ||||
| WACC \ EV/EBITDA Exit Multiple | 15.8x | 17.8x | 19.8x | 21.8x | 23.8x |
|---|---|---|---|---|---|
| 5.9% | $242 | $275 | $307 | $339 | $372 |
| 6.9% | $229 | $260 | $291 | $322 | $353 |
| 7.9% | $217 | $247 | $276 | $306 | $335 |
| 8.9% | $206 | $234 | $262 | $290 | $318 |
| 9.9% | $195 | $221 | $248 | $275 | $302 |
Current price: $303.21. 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.