Using an unlevered Free Cash Flow to Firm (FCFF) model, we project MSCI Inc.'s cash flows over 5 years with line-by-line expense modeling. Revenue is projected revenue growing from 10.0% to 7.9% 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 113, DPO 11, DIO 60). At a 7.5% WACC with mid-year discounting, the terminal value (82% of enterprise value) is derived by applying the industry peer median EV/EBITDA multiple of 18.1x to Year 6 EBITDA. After subtracting net debt, the equity value implies a fair price of $507.31 per share, suggesting MSCI is fairly valued by 5.5% at the current price of $536.75.
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 | 1,804 | 1,958 | 2,126 | 2,278 | 2,457 | 2,518 |
| (−) Net Interest | 248 | 270 | 293 | 314 | 338 | 347 |
| (+) D&A | 58 | 64 | 67 | 68 | 82 | 84 |
| EBITDA | 2,111 | 2,291 | 2,485 | 2,659 | 2,877 | 2,949 |
| (−) Tax | 310 | 336 | 365 | 391 | 422 | — |
| (−) CapEx | 82 | 89 | 96 | 103 | 111 | — |
| (−) ΔWC | 178 | 98 | 107 | 97 | 114 | — |
| Free Cash Flow (FCF) | 1,540 | 1,768 | 1,917 | 2,068 | 2,230 | — |
| Peers' EBITDA Multiple | 18.1x | |||||
| Terminal Value | 53,287 | |||||
| WACC / Discount Rate | 7.50% | |||||
| Timing of FCF (mid year) | 0.5 | 1.5 | 2.5 | 3.5 | 4.5 | 5 |
| Present Value of FCF | 1,486 | 1,586 | 1,600 | 1,606 | 1,610 | 37,115 |
| Enterprise Value | 45,003 | |||||
| Projection Period | 7,887 | 17.5% | ||||
| Terminal Value | 37,115 | 82.5% | ||||
| (−) Current Net Debt | 5,794 | |||||
| Equity Value | 39,208 | |||||
| (÷) Outstanding Shares | 77M | |||||
| Fair Price | $507 | -5.5% | ||||
| WACC \ EV/EBITDA Exit Multiple | 14.1x | 16.1x | 18.1x | 20.1x | 22.1x |
|---|---|---|---|---|---|
| 5.5% | $443 | $501 | $560 | $618 | $676 |
| 6.5% | $421 | $477 | $533 | $588 | $644 |
| 7.5% | $401 | $454 | $507 | $560 | $614 |
| 8.5% | $382 | $432 | $483 | $534 | $585 |
| 9.5% | $363 | $412 | $460 | $509 | $557 |
Current price: $536.75. 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.