Using an unlevered Free Cash Flow to Firm (FCFF) model, we project Henry Schein, Inc.'s cash flows over 5 years with line-by-line expense modeling. Revenue is projected revenue growing from 4.1% to 1.5% 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 46, DPO 42, DIO 77). At a 6.9% WACC with mid-year discounting, the terminal value (85% of enterprise value) is derived by applying the industry peer median EV/EBITDA multiple of 18.3x to Year 6 EBITDA. After subtracting net debt, the equity value implies a fair price of $117.33 per share, suggesting HSIC is undervalued by 59.2% at the current price of $73.72.
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 | 772 | 801 | 829 | 861 | 874 | 896 |
| (−) Net Interest | 95 | 98 | 101 | 105 | 107 | 110 |
| (+) D&A | 130 | 142 | 152 | 153 | 146 | 150 |
| EBITDA | 997 | 1,040 | 1,082 | 1,119 | 1,128 | 1,156 |
| (−) Tax | 178 | 185 | 191 | 199 | 202 | — |
| (−) CapEx | 140 | 146 | 151 | 157 | 159 | — |
| (−) ΔWC | 159 | 97 | 97 | 111 | 46 | — |
| Free Cash Flow (FCF) | 519 | 613 | 643 | 653 | 722 | — |
| Peers' EBITDA Multiple | 18.3x | |||||
| Terminal Value | 21,135 | |||||
| WACC / Discount Rate | 6.87% | |||||
| Timing of FCF (mid year) | 0.5 | 1.5 | 2.5 | 3.5 | 4.5 | 5 |
| Present Value of FCF | 502 | 555 | 544 | 517 | 535 | 15,160 |
| Enterprise Value | 17,814 | |||||
| Projection Period | 2,654 | 14.9% | ||||
| Terminal Value | 15,160 | 85.1% | ||||
| (−) Current Net Debt | 3,531 | |||||
| Equity Value | 14,283 | |||||
| (÷) Outstanding Shares | 122M | |||||
| Fair Price | $117 | +59.2% | ||||
| WACC \ EV/EBITDA Exit Multiple | 14.3x | 16.3x | 18.3x | 20.3x | 22.3x |
|---|---|---|---|---|---|
| 4.9% | $101 | $116 | $131 | $146 | $161 |
| 5.9% | $95 | $110 | $124 | $138 | $152 |
| 6.9% | $90 | $104 | $117 | $131 | $145 |
| 7.9% | $85 | $98 | $111 | $124 | $137 |
| 8.9% | $80 | $93 | $105 | $118 | $130 |
Current price: $73.72. 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.