Using an unlevered Free Cash Flow to Firm (FCFF) model, we project Hubbell Incorporated's cash flows over 5 years with line-by-line expense modeling. Revenue is projected revenue growing from 8.2% to 8.7% 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 54, DPO 57, DIO 86). At a 8.5% WACC with mid-year discounting, the terminal value (83% 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 $366.23 per share, suggesting HUBB is overvalued by 24.5% at the current price of $485.21.
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 | 1,026 | 1,081 | 1,134 | 1,232 | 1,339 | 1,373 |
| (−) Net Interest | 68 | 72 | 75 | 82 | 89 | 91 |
| (+) D&A | 144 | 161 | 171 | 177 | 182 | 187 |
| EBITDA | 1,239 | 1,314 | 1,381 | 1,491 | 1,610 | 1,650 |
| (−) Tax | 216 | 227 | 238 | 259 | 281 | — |
| (−) CapEx | 173 | 183 | 192 | 208 | 226 | — |
| (−) ΔWC | -95 | 68 | 66 | 122 | 132 | — |
| Free Cash Flow (FCF) | 945 | 836 | 885 | 902 | 970 | — |
| Peers' EBITDA Multiple | 16.4x | |||||
| Terminal Value | 27,101 | |||||
| WACC / Discount Rate | 8.50% | |||||
| Timing of FCF (mid year) | 0.5 | 1.5 | 2.5 | 3.5 | 4.5 | 5 |
| Present Value of FCF | 907 | 740 | 722 | 678 | 672 | 18,027 |
| Enterprise Value | 21,747 | |||||
| Projection Period | 3,720 | 17.1% | ||||
| Terminal Value | 18,027 | 82.9% | ||||
| (−) Current Net Debt | 2,126 | |||||
| Equity Value | 19,621 | |||||
| (÷) Outstanding Shares | 54M | |||||
| Fair Price | $366 | -24.5% | ||||
| WACC \ EV/EBITDA Exit Multiple | 12.4x | 14.4x | 16.4x | 18.4x | 20.4x |
|---|---|---|---|---|---|
| 6.5% | $312 | $357 | $402 | $447 | $492 |
| 7.5% | $298 | $341 | $384 | $427 | $470 |
| 8.5% | $284 | $325 | $366 | $407 | $448 |
| 9.5% | $271 | $311 | $350 | $389 | $428 |
| 10.5% | $259 | $297 | $334 | $371 | $409 |
Current price: $485.21. 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.