Using an unlevered Free Cash Flow to Firm (FCFF) model, we project NVIDIA Corporation's cash flows over 5 years with line-by-line expense modeling. Revenue is projected revenue growing from 69.3% to 10.6% 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 61, DPO 59, DIO 123). At a 9.3% WACC with mid-year discounting, the terminal value (88% of enterprise value) is derived by applying the industry peer median EV/EBITDA multiple of 28.0x to Year 6 EBITDA. After subtracting net debt, the equity value implies a fair price of $249.12 per share, suggesting NVDA is undervalued by 39.4% at the current price of $178.68.
Adjust parameters to explore scenarios. Changes are for exploration only and do not affect saved valuations.
| 2027 | 2028 | 2029 | 2030 | 2031 | Terminal | |
|---|---|---|---|---|---|---|
| Profit Before Tax | 169,899 | 223,356 | 255,872 | 246,078 | 272,261 | 279,068 |
| (−) Net Interest | 1,886 | 2,480 | 2,841 | 2,732 | 3,023 | 3,098 |
| (+) D&A | 2,631 | 4,989 | 7,978 | 11,609 | 14,660 | 15,026 |
| EBITDA | 174,416 | 230,824 | 266,691 | 260,419 | 289,943 | 297,192 |
| (−) Tax | 12,848 | 16,890 | 19,349 | 18,608 | 20,588 | — |
| (−) CapEx | 12,764 | 16,780 | 19,223 | 18,488 | 20,455 | — |
| (−) ΔWC | 31,487 | 25,657 | 15,606 | -4,701 | 12,567 | — |
| Free Cash Flow (FCF) | 117,317 | 171,497 | 212,512 | 228,024 | 236,333 | — |
| Peers' EBITDA Multiple | 28.0x | |||||
| Terminal Value | 8,312,459 | |||||
| WACC / Discount Rate | 9.29% | |||||
| Timing of FCF (mid year) | 0.5 | 1.5 | 2.5 | 3.5 | 4.5 | 5 |
| Present Value of FCF | 112,218 | 150,093 | 170,174 | 167,067 | 158,431 | 5,330,218 |
| Enterprise Value | 6,088,201 | |||||
| Projection Period | 757,983 | 12.5% | ||||
| Terminal Value | 5,330,218 | 87.5% | ||||
| (−) Current Net Debt | 807 | |||||
| Equity Value | 6,087,394 | |||||
| (÷) Outstanding Shares | 24432M | |||||
| Fair Price | $249 | +39.4% | ||||
| WACC \ EV/EBITDA Exit Multiple | 24.0x | 26.0x | 28.0x | 30.0x | 32.0x |
|---|---|---|---|---|---|
| 7.3% | $238 | $255 | $272 | $289 | $306 |
| 8.3% | $227 | $244 | $260 | $276 | $293 |
| 9.3% | $218 | $234 | $249 | $265 | $280 |
| 10.3% | $209 | $224 | $239 | $254 | $268 |
| 11.3% | $200 | $215 | $229 | $243 | $257 |
Current price: $178.68. 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.