Using an unlevered Free Cash Flow to Firm (FCFF) model, we project Mid-America Apartment Communities, Inc.'s cash flows over 5 years with line-by-line expense modeling. Revenue is projected revenue growing from 1.8% to -3.3% 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 45, DPO 28, DIO 60). At a 7.2% WACC with mid-year discounting, the terminal value (84% of enterprise value) is derived by applying the industry peer median EV/EBITDA multiple of 14.5x to Year 6 EBITDA. After subtracting net debt, the equity value implies a fair price of $78.18 per share, suggesting MAA is overvalued by 36.2% at the current price of $122.51.
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 | 491 | 506 | 534 | 563 | 544 | 558 |
| (−) Net Interest | 178 | 183 | 193 | 204 | 197 | 202 |
| (+) D&A | 366 | 345 | 370 | 390 | 418 | 429 |
| EBITDA | 1,035 | 1,034 | 1,097 | 1,157 | 1,160 | 1,189 |
| (−) Tax | 4 | 4 | 5 | 5 | 5 | — |
| (−) CapEx | 406 | 418 | 442 | 466 | 451 | — |
| (−) ΔWC | 410 | 13 | 24 | 24 | -15 | — |
| Free Cash Flow (FCF) | 214 | 599 | 627 | 662 | 720 | — |
| Peers' EBITDA Multiple | 14.5x | |||||
| Terminal Value | 17,277 | |||||
| WACC / Discount Rate | 7.23% | |||||
| Timing of FCF (mid year) | 0.5 | 1.5 | 2.5 | 3.5 | 4.5 | 5 |
| Present Value of FCF | 207 | 539 | 527 | 518 | 526 | 12,188 |
| Enterprise Value | 14,505 | |||||
| Projection Period | 2,317 | 16.0% | ||||
| Terminal Value | 12,188 | 84.0% | ||||
| (−) Current Net Debt | 5,345 | |||||
| Equity Value | 9,160 | |||||
| (÷) Outstanding Shares | 117M | |||||
| Fair Price | $78 | -36.2% | ||||
| WACC \ EV/EBITDA Exit Multiple | 10.5x | 12.5x | 14.5x | 16.5x | 18.5x |
|---|---|---|---|---|---|
| 5.2% | $58 | $74 | $90 | $105 | $121 |
| 6.2% | $54 | $69 | $84 | $99 | $114 |
| 7.2% | $50 | $64 | $78 | $93 | $107 |
| 8.2% | $46 | $59 | $73 | $87 | $100 |
| 9.2% | $42 | $55 | $68 | $81 | $94 |
Current price: $122.51. 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.