Using an unlevered Free Cash Flow to Firm (FCFF) model, we project Micron Technology, Inc.'s cash flows over 5 years with line-by-line expense modeling. Revenue is projected revenue growing from 177.8% to 14.6% 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 75, DPO 44, DIO 144). At a 9.2% WACC with mid-year discounting, the terminal value (113% of enterprise value) is derived by applying the industry peer median EV/EBITDA multiple of 30.1x to Year 6 EBITDA. After subtracting net debt, the equity value implies a fair price of $1325.35 per share, suggesting MU is undervalued by 246.9% at the current price of $382.09.
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 | 9,265 | 14,480 | 13,704 | 21,651 | 24,813 | 25,433 |
| (−) Net Interest | 1,513 | 2,365 | 2,238 | 3,536 | 4,052 | 4,153 |
| (+) D&A | 10,803 | 17,130 | 27,741 | 38,531 | 56,327 | 57,735 |
| EBITDA | 21,581 | 33,975 | 43,682 | 63,717 | 85,192 | 87,322 |
| (−) Tax | 1,480 | 2,313 | 2,189 | 3,459 | 3,964 | — |
| (−) CapEx | 41,666 | 65,118 | 61,628 | 97,366 | 111,586 | — |
| (−) ΔWC | 27,564 | 23,669 | -3,522 | 36,070 | 14,351 | — |
| Free Cash Flow (FCF) | -49,129 | -57,125 | -16,613 | -73,177 | -44,709 | — |
| Peers' EBITDA Multiple | 30.1x | |||||
| Terminal Value | 2,624,013 | |||||
| WACC / Discount Rate | 9.18% | |||||
| Timing of FCF (mid year) | 0.5 | 1.5 | 2.5 | 3.5 | 4.5 | 5 |
| Present Value of FCF | -47,017 | -50,071 | -13,337 | -53,803 | -30,107 | 1,691,057 |
| Enterprise Value | 1,496,721 | |||||
| Projection Period | -194,336 | -13.0% | ||||
| Terminal Value | 1,691,057 | 113.0% | ||||
| (−) Current Net Debt | 5,636 | |||||
| Equity Value | 1,491,085 | |||||
| (÷) Outstanding Shares | 1125M | |||||
| Fair Price | $1325 | +246.9% | ||||
| WACC \ EV/EBITDA Exit Multiple | 26.0x | 28.0x | 30.0x | 32.0x | 34.0x |
|---|---|---|---|---|---|
| 7.2% | $1244 | $1353 | $1463 | $1573 | $1683 |
| 8.2% | $1183 | $1288 | $1392 | $1497 | $1602 |
| 9.2% | $1125 | $1225 | $1325 | $1425 | $1525 |
| 10.2% | $1071 | $1166 | $1262 | $1358 | $1453 |
| 11.2% | $1019 | $1111 | $1202 | $1293 | $1385 |
Current price: $382.09. 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.