Using an unlevered Free Cash Flow to Firm (FCFF) model, we project NVR, Inc.'s cash flows over 5 years with line-by-line expense modeling. Revenue is projected revenue growing from -5.7% to 3.6% 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 1, DPO 19, DIO 93). At a 8.3% WACC with mid-year discounting, the terminal value (67% of enterprise value) is derived by applying the industry peer median EV/EBITDA multiple of 8.6x to Year 6 EBITDA. After subtracting net debt, the equity value implies a fair price of $6324.16 per share, suggesting NVR is fairly valued by 3.6% at the current price of $6557.87.
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 | 1,788 | 1,903 | 1,910 | 1,979 | 2,051 | 2,102 |
| (−) Net Interest | 35 | 37 | 37 | 39 | 40 | 41 |
| (+) D&A | 23 | 24 | 25 | 25 | 24 | 24 |
| EBITDA | 1,846 | 1,964 | 1,973 | 2,043 | 2,115 | 2,168 |
| (−) Tax | 385 | 409 | 411 | 426 | 441 | — |
| (−) CapEx | 22 | 24 | 24 | 25 | 26 | — |
| (−) ΔWC | 58 | 97 | 6 | 58 | 60 | — |
| Free Cash Flow (FCF) | 1,380 | 1,434 | 1,531 | 1,534 | 1,588 | — |
| Peers' EBITDA Multiple | 8.6x | |||||
| Terminal Value | 18,686 | |||||
| WACC / Discount Rate | 8.32% | |||||
| Timing of FCF (mid year) | 0.5 | 1.5 | 2.5 | 3.5 | 4.5 | 5 |
| Present Value of FCF | 1,326 | 1,272 | 1,254 | 1,160 | 1,108 | 12,533 |
| Enterprise Value | 18,654 | |||||
| Projection Period | 6,121 | 32.8% | ||||
| Terminal Value | 12,533 | 67.2% | ||||
| (−) Current Net Debt | (760) | |||||
| Equity Value | 19,414 | |||||
| (÷) Outstanding Shares | 3M | |||||
| Fair Price | $6326 | -3.5% | ||||
| WACC \ EV/EBITDA Exit Multiple | 4.6x | 6.6x | 8.6x | 10.6x | 12.6x |
|---|---|---|---|---|---|
| 6.3% | $4735 | $5775 | $6815 | $7855 | $8895 |
| 7.3% | $4578 | $5571 | $6563 | $7556 | $8548 |
| 8.3% | $4429 | $5377 | $6324 | $7272 | $8219 |
| 9.3% | $4287 | $5192 | $6097 | $7002 | $7907 |
| 10.3% | $4153 | $5017 | $5882 | $6747 | $7611 |
Current price: $6557.87. 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.