Using an unlevered Free Cash Flow to Firm (FCFF) model, we project News Corporation's cash flows over 5 years with line-by-line expense modeling. Revenue is projected revenue growing from 4.3% to 1.4% 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 61, DPO 31, DIO 26). At a 7.2% WACC with mid-year discounting, the terminal value (74% of enterprise value) is derived by applying the industry peer median EV/EBITDA multiple of 10.5x to Year 6 EBITDA. After subtracting net debt, the equity value implies a fair price of $86.87 per share, suggesting NWS is undervalued by 215.5% at the current price of $27.54.
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 | 3,864 | 4,009 | 4,173 | 4,283 | 4,342 | 4,451 |
| (−) Net Interest | 64 | 66 | 69 | 70 | 71 | 73 |
| (+) D&A | 430 | 438 | 427 | 420 | 444 | 455 |
| EBITDA | 4,358 | 4,513 | 4,669 | 4,774 | 4,857 | 4,979 |
| (−) Tax | 966 | 1,002 | 1,043 | 1,070 | 1,085 | — |
| (−) CapEx | 429 | 445 | 463 | 476 | 482 | — |
| (−) ΔWC | -139 | 53 | 60 | 40 | 22 | — |
| Free Cash Flow (FCF) | 3,102 | 3,013 | 3,103 | 3,187 | 3,268 | — |
| Peers' EBITDA Multiple | 10.5x | |||||
| Terminal Value | 52,227 | |||||
| WACC / Discount Rate | 7.22% | |||||
| Timing of FCF (mid year) | 0.5 | 1.5 | 2.5 | 3.5 | 4.5 | 5 |
| Present Value of FCF | 2,996 | 2,714 | 2,606 | 2,497 | 2,388 | 36,857 |
| Enterprise Value | 50,059 | |||||
| Projection Period | 13,202 | 26.4% | ||||
| Terminal Value | 36,857 | 73.6% | ||||
| (−) Current Net Debt | 537 | |||||
| Equity Value | 49,522 | |||||
| (÷) Outstanding Shares | 570M | |||||
| Fair Price | $87 | +215.6% | ||||
| WACC \ EV/EBITDA Exit Multiple | 6.5x | 8.5x | 10.5x | 12.5x | 14.5x |
|---|---|---|---|---|---|
| 5.2% | $67 | $81 | $94 | $108 | $121 |
| 6.2% | $65 | $78 | $90 | $103 | $116 |
| 7.2% | $62 | $75 | $87 | $99 | $112 |
| 8.2% | $60 | $72 | $83 | $95 | $107 |
| 9.2% | $58 | $69 | $80 | $91 | $103 |
Current price: $27.54. 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.