Using an unlevered Free Cash Flow to Firm (FCFF) model, we project Incyte Corporation's cash flows over 5 years with line-by-line expense modeling. Revenue is projected revenue growing from 8.9% to 3.5% 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 73, DPO 246, DIO 66). At a 7.8% WACC with mid-year discounting, the terminal value (74% of enterprise value) is derived by applying the industry peer median EV/EBITDA multiple of 13.0x to Year 6 EBITDA. After subtracting net debt, the equity value implies a fair price of $72.53 per share, suggesting INCY is overvalued by 21.8% at the current price of $92.73.
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 | 944 | 1,048 | 1,093 | 774 | 800 | 820 |
| (−) Net Interest | 3 | 4 | 4 | 3 | 3 | 3 |
| (+) D&A | 90 | 83 | 99 | 123 | 129 | 132 |
| EBITDA | 1,038 | 1,134 | 1,196 | 899 | 932 | 956 |
| (−) Tax | 208 | 231 | 241 | 170 | 176 | — |
| (−) CapEx | 143 | 159 | 166 | 118 | 122 | — |
| (−) ΔWC | -15 | 99 | 43 | -304 | 25 | — |
| Free Cash Flow (FCF) | 702 | 646 | 746 | 916 | 609 | — |
| Peers' EBITDA Multiple | 13.0x | |||||
| Terminal Value | 12,413 | |||||
| WACC / Discount Rate | 7.82% | |||||
| Timing of FCF (mid year) | 0.5 | 1.5 | 2.5 | 3.5 | 4.5 | 5 |
| Present Value of FCF | 676 | 577 | 618 | 704 | 434 | 8,519 |
| Enterprise Value | 11,528 | |||||
| Projection Period | 3,009 | 26.1% | ||||
| Terminal Value | 8,519 | 73.9% | ||||
| (−) Current Net Debt | (3,028) | |||||
| Equity Value | 14,556 | |||||
| (÷) Outstanding Shares | 201M | |||||
| Fair Price | $73 | -21.8% | ||||
| WACC \ EV/EBITDA Exit Multiple | 9.0x | 11.0x | 13.0x | 15.0x | 17.0x |
|---|---|---|---|---|---|
| 5.8% | $63 | $70 | $77 | $85 | $92 |
| 6.8% | $61 | $68 | $75 | $82 | $89 |
| 7.8% | $59 | $66 | $73 | $79 | $86 |
| 8.8% | $58 | $64 | $70 | $77 | $83 |
| 9.8% | $56 | $62 | $68 | $74 | $80 |
Current price: $92.73. 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.