Using an unlevered Free Cash Flow to Firm (FCFF) model, we project NIKE, Inc.'s cash flows over 5 years with line-by-line expense modeling. Revenue is projected revenue growing from 0.9% to 6.1% 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 34, DPO 42, DIO 106). At a 8.1% WACC with mid-year discounting, the terminal value (83% of enterprise value) is derived by applying the industry peer median EV/EBITDA multiple of 18.8x to Year 6 EBITDA. After subtracting net debt, the equity value implies a fair price of $80.67 per share, suggesting NKE is undervalued by 54.9% at the current price of $52.08.
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 | 5,487 | 5,699 | 5,951 | 6,452 | 6,845 | 7,016 |
| (−) Net Interest | 276 | 287 | 300 | 325 | 345 | 353 |
| (+) D&A | 733 | 736 | 731 | 691 | 695 | 713 |
| EBITDA | 6,496 | 6,721 | 6,982 | 7,468 | 7,885 | 8,082 |
| (−) Tax | 806 | 837 | 874 | 947 | 1,005 | — |
| (−) CapEx | 709 | 736 | 768 | 833 | 884 | — |
| (−) ΔWC | 184 | 344 | 411 | 812 | 638 | — |
| Free Cash Flow (FCF) | 4,798 | 4,805 | 4,929 | 4,875 | 5,357 | — |
| Peers' EBITDA Multiple | 18.8x | |||||
| Terminal Value | 152,098 | |||||
| WACC / Discount Rate | 8.08% | |||||
| Timing of FCF (mid year) | 0.5 | 1.5 | 2.5 | 3.5 | 4.5 | 5 |
| Present Value of FCF | 4,615 | 4,276 | 4,059 | 3,714 | 3,776 | 103,128 |
| Enterprise Value | 123,568 | |||||
| Projection Period | 20,441 | 16.5% | ||||
| Terminal Value | 103,128 | 83.5% | ||||
| (−) Current Net Debt | 3,554 | |||||
| Equity Value | 120,014 | |||||
| (÷) Outstanding Shares | 1488M | |||||
| Fair Price | $81 | +54.9% | ||||
| WACC \ EV/EBITDA Exit Multiple | 14.8x | 16.8x | 18.8x | 20.8x | 22.8x |
|---|---|---|---|---|---|
| 6.1% | $72 | $80 | $88 | $96 | $104 |
| 7.1% | $69 | $77 | $84 | $92 | $100 |
| 8.1% | $66 | $73 | $81 | $88 | $95 |
| 9.1% | $63 | $70 | $77 | $84 | $91 |
| 10.1% | $61 | $67 | $74 | $81 | $87 |
Current price: $52.08. 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.