Using an unlevered Free Cash Flow to Firm (FCFF) model, we project Invitation Homes Inc.'s cash flows over 5 years with line-by-line expense modeling. Revenue is projected revenue growing from 2.0% 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 8, DPO 30, DIO 60). At a 6.9% WACC with mid-year discounting, the terminal value (78% of enterprise value) is derived by applying the industry peer median EV/EBITDA multiple of 14.7x to Year 6 EBITDA. After subtracting net debt, the equity value implies a fair price of $26.74 per share, suggesting INVH is fairly valued by 7.2% at the current price of $24.95.
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 | 873 | 891 | 935 | 1,011 | 1,093 | 1,120 |
| (−) Net Interest | 392 | 400 | 420 | 454 | 491 | 503 |
| (+) D&A | 162 | 178 | 186 | 194 | 207 | 212 |
| EBITDA | 1,427 | 1,469 | 1,541 | 1,659 | 1,790 | 1,835 |
| (−) Tax | 0 | 0 | 0 | 0 | 0 | — |
| (−) CapEx | 243 | 248 | 260 | 281 | 304 | — |
| (−) ΔWC | 118 | 4 | 9 | 15 | 17 | — |
| Free Cash Flow (FCF) | 1,066 | 1,217 | 1,272 | 1,362 | 1,469 | — |
| Peers' EBITDA Multiple | 14.7x | |||||
| Terminal Value | 26,919 | |||||
| WACC / Discount Rate | 6.92% | |||||
| Timing of FCF (mid year) | 0.5 | 1.5 | 2.5 | 3.5 | 4.5 | 5 |
| Present Value of FCF | 1,031 | 1,101 | 1,076 | 1,078 | 1,087 | 19,268 |
| Enterprise Value | 24,641 | |||||
| Projection Period | 5,373 | 21.8% | ||||
| Terminal Value | 19,268 | 78.2% | ||||
| (−) Current Net Debt | 8,250 | |||||
| Equity Value | 16,391 | |||||
| (÷) Outstanding Shares | 613M | |||||
| Fair Price | $27 | +7.2% | ||||
| WACC \ EV/EBITDA Exit Multiple | 10.7x | 12.7x | 14.7x | 16.7x | 18.7x |
|---|---|---|---|---|---|
| 4.9% | $21 | $26 | $30 | $35 | $40 |
| 5.9% | $19 | $24 | $28 | $33 | $37 |
| 6.9% | $18 | $22 | $27 | $31 | $35 |
| 7.9% | $17 | $21 | $25 | $29 | $33 |
| 8.9% | $16 | $20 | $24 | $27 | $31 |
Current price: $24.95. 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.