Using an unlevered Free Cash Flow to Firm (FCFF) model, we project Nordson Corporation's cash flows over 5 years with line-by-line expense modeling. Revenue is projected revenue growing from 5.7% to 4.3% 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 78, DPO 32, DIO 130). At a 8.6% WACC with mid-year discounting, the terminal value (85% of enterprise value) is derived by applying the industry peer median EV/EBITDA multiple of 20.7x to Year 6 EBITDA. After subtracting net debt, the equity value implies a fair price of $228.60 per share, suggesting NDSN is fairly valued by 14.0% at the current price of $265.79.
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 | 643 | 674 | 704 | 734 | 766 | 785 |
| (−) Net Interest | 66 | 69 | 72 | 75 | 78 | 80 |
| (+) D&A | 49 | 53 | 54 | 59 | 59 | 61 |
| EBITDA | 758 | 796 | 830 | 869 | 903 | 926 |
| (−) Tax | 131 | 137 | 143 | 149 | 156 | — |
| (−) CapEx | 55 | 58 | 61 | 63 | 66 | — |
| (−) ΔWC | 74 | 48 | 46 | 46 | 48 | — |
| Free Cash Flow (FCF) | 498 | 552 | 580 | 610 | 633 | — |
| Peers' EBITDA Multiple | 20.7x | |||||
| Terminal Value | 19,198 | |||||
| WACC / Discount Rate | 8.57% | |||||
| Timing of FCF (mid year) | 0.5 | 1.5 | 2.5 | 3.5 | 4.5 | 5 |
| Present Value of FCF | 478 | 488 | 472 | 457 | 437 | 12,724 |
| Enterprise Value | 15,056 | |||||
| Projection Period | 2,333 | 15.5% | ||||
| Terminal Value | 12,724 | 84.5% | ||||
| (−) Current Net Debt | 2,048 | |||||
| Equity Value | 13,008 | |||||
| (÷) Outstanding Shares | 57M | |||||
| Fair Price | $229 | -14.0% | ||||
| WACC \ EV/EBITDA Exit Multiple | 16.7x | 18.7x | 20.7x | 22.7x | 24.7x |
|---|---|---|---|---|---|
| 6.6% | $205 | $229 | $252 | $276 | $300 |
| 7.6% | $195 | $218 | $240 | $263 | $285 |
| 8.6% | $185 | $207 | $229 | $250 | $272 |
| 9.6% | $176 | $197 | $218 | $238 | $259 |
| 10.6% | $168 | $188 | $207 | $227 | $247 |
Current price: $265.79. 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.