Using an unlevered Free Cash Flow to Firm (FCFF) model, we project IQVIA Holdings Inc.'s cash flows over 5 years with line-by-line expense modeling. Revenue is projected revenue growing from 5.7% to 5.8% 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 76, DPO 43, DIO 60). At a 7.0% WACC with mid-year discounting, the terminal value (89% of enterprise value) is derived by applying the industry peer median EV/EBITDA multiple of 17.6x to Year 6 EBITDA. After subtracting net debt, the equity value implies a fair price of $334.66 per share, suggesting IQV is undervalued by 97.5% at the current price of $169.47.
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 | 2,696 | 2,851 | 3,021 | 3,215 | 3,402 | 3,487 |
| (−) Net Interest | 652 | 689 | 730 | 777 | 822 | 843 |
| (+) D&A | 634 | 652 | 672 | 706 | 761 | 780 |
| EBITDA | 3,981 | 4,192 | 4,424 | 4,699 | 4,985 | 5,110 |
| (−) Tax | 398 | 421 | 447 | 475 | 503 | — |
| (−) CapEx | 732 | 774 | 820 | 873 | 924 | — |
| (−) ΔWC | 4,453 | 238 | 261 | 297 | 286 | — |
| Free Cash Flow (FCF) | -1,603 | 2,759 | 2,896 | 3,053 | 3,272 | — |
| Peers' EBITDA Multiple | 17.6x | |||||
| Terminal Value | 89,672 | |||||
| WACC / Discount Rate | 6.97% | |||||
| Timing of FCF (mid year) | 0.5 | 1.5 | 2.5 | 3.5 | 4.5 | 5 |
| Present Value of FCF | -1,550 | 2,493 | 2,447 | 2,412 | 2,417 | 64,030 |
| Enterprise Value | 72,249 | |||||
| Projection Period | 8,219 | 11.4% | ||||
| Terminal Value | 64,030 | 88.6% | ||||
| (−) Current Net Debt | 14,194 | |||||
| Equity Value | 58,055 | |||||
| (÷) Outstanding Shares | 174M | |||||
| Fair Price | $335 | +97.5% | ||||
| WACC \ EV/EBITDA Exit Multiple | 13.6x | 15.6x | 17.6x | 19.6x | 21.6x |
|---|---|---|---|---|---|
| 5.0% | $282 | $328 | $374 | $421 | $467 |
| 6.0% | $266 | $310 | $354 | $398 | $442 |
| 7.0% | $251 | $293 | $335 | $377 | $419 |
| 8.0% | $236 | $276 | $316 | $357 | $397 |
| 9.0% | $222 | $261 | $299 | $337 | $376 |
Current price: $169.47. 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.