Using an unlevered Free Cash Flow to Firm (FCFF) model, we project NetApp, Inc.'s cash flows over 5 years with line-by-line expense modeling. Revenue is projected revenue growing from 4.2% to 3.4% 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 63, DPO 90, DIO 31). At a 8.6% WACC with mid-year discounting, the terminal value (87% of enterprise value) is derived by applying the industry peer median EV/EBITDA multiple of 29.2x to Year 6 EBITDA. After subtracting net debt, the equity value implies a fair price of $187.08 per share, suggesting NTAP is undervalued by 77.9% at the current price of $105.19.
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 | 1,231 | 1,292 | 1,361 | 1,407 | 1,455 | 1,492 |
| (−) Net Interest | 75 | 79 | 83 | 86 | 89 | 91 |
| (+) D&A | 190 | 199 | 198 | 196 | 212 | 218 |
| EBITDA | 1,496 | 1,570 | 1,641 | 1,689 | 1,756 | 1,800 |
| (−) Tax | 136 | 143 | 150 | 155 | 161 | — |
| (−) CapEx | 208 | 218 | 230 | 238 | 246 | — |
| (−) ΔWC | -93 | 41 | 46 | 31 | 32 | — |
| Free Cash Flow (FCF) | 1,245 | 1,168 | 1,215 | 1,264 | 1,318 | — |
| Peers' EBITDA Multiple | 29.2x | |||||
| Terminal Value | 52,570 | |||||
| WACC / Discount Rate | 8.62% | |||||
| Timing of FCF (mid year) | 0.5 | 1.5 | 2.5 | 3.5 | 4.5 | 5 |
| Present Value of FCF | 1,195 | 1,032 | 988 | 947 | 908 | 34,776 |
| Enterprise Value | 39,846 | |||||
| Projection Period | 5,070 | 12.7% | ||||
| Terminal Value | 34,776 | 87.3% | ||||
| (−) Current Net Debt | 749 | |||||
| Equity Value | 39,097 | |||||
| (÷) Outstanding Shares | 209M | |||||
| Fair Price | $187 | +77.8% | ||||
| WACC \ EV/EBITDA Exit Multiple | 25.2x | 27.2x | 29.2x | 31.2x | 33.2x |
|---|---|---|---|---|---|
| 6.6% | $179 | $192 | $204 | $217 | $229 |
| 7.6% | $172 | $184 | $196 | $207 | $219 |
| 8.6% | $164 | $176 | $187 | $198 | $210 |
| 9.6% | $157 | $168 | $179 | $190 | $201 |
| 10.6% | $151 | $161 | $172 | $182 | $192 |
Current price: $105.19. 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.