Using an unlevered Free Cash Flow to Firm (FCFF) model, we project Jacobs Solutions Inc.'s cash flows over 5 years with line-by-line expense modeling. Revenue is projected revenue growing from -21.8% to -3.9% 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 94, DPO 43, DIO 60). At a 8.3% WACC with mid-year discounting, the terminal value (86% of enterprise value) is derived by applying the industry peer median EV/EBITDA multiple of 10.7x to Year 6 EBITDA. After subtracting net debt, the equity value implies a fair price of $36.26 per share, suggesting J is overvalued by 72.0% at the current price of $129.73.
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 | 449 | 477 | 511 | 491 | 472 | 484 |
| (−) Net Interest | 109 | 115 | 124 | 119 | 114 | 117 |
| (+) D&A | 112 | 112 | 106 | 100 | 96 | 98 |
| EBITDA | 669 | 703 | 740 | 709 | 682 | 699 |
| (−) Tax | 116 | 123 | 132 | 127 | 122 | — |
| (−) CapEx | 93 | 99 | 106 | 102 | 98 | — |
| (−) ΔWC | 1,026 | 169 | 210 | -122 | -117 | — |
| Free Cash Flow (FCF) | -566 | 312 | 292 | 602 | 579 | — |
| Peers' EBITDA Multiple | 10.7x | |||||
| Terminal Value | 7,456 | |||||
| WACC / Discount Rate | 8.33% | |||||
| Timing of FCF (mid year) | 0.5 | 1.5 | 2.5 | 3.5 | 4.5 | 5 |
| Present Value of FCF | -544 | 277 | 239 | 455 | 404 | 4,997 |
| Enterprise Value | 5,827 | |||||
| Projection Period | 831 | 14.3% | ||||
| Terminal Value | 4,997 | 85.7% | ||||
| (−) Current Net Debt | 1,474 | |||||
| Equity Value | 4,353 | |||||
| (÷) Outstanding Shares | 120M | |||||
| Fair Price | $36 | -72.1% | ||||
| WACC \ EV/EBITDA Exit Multiple | 6.7x | 8.7x | 10.7x | 12.7x | 14.7x |
|---|---|---|---|---|---|
| 6.3% | $24 | $32 | $41 | $50 | $58 |
| 7.3% | $22 | $30 | $39 | $47 | $55 |
| 8.3% | $21 | $28 | $36 | $44 | $52 |
| 9.3% | $19 | $27 | $34 | $42 | $49 |
| 10.3% | $18 | $25 | $32 | $39 | $46 |
Current price: $129.73. 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.