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 4.2% 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 62, DPO 30, DIO 60). At a 7.1% WACC with mid-year discounting, the terminal value (82% of enterprise value) is derived by applying the industry peer median EV/EBITDA multiple of 12.1x to Year 6 EBITDA. After subtracting net debt, the equity value implies a fair price of $32.07 per share, suggesting NWSA is undervalued by 32.1% at the current price of $24.28.
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 | 1,095 | 1,135 | 1,183 | 1,214 | 1,231 | 1,261 |
| (−) Net Interest | 55 | 57 | 59 | 61 | 62 | 63 |
| (+) D&A | 458 | 472 | 467 | 466 | 469 | 481 |
| EBITDA | 1,608 | 1,664 | 1,709 | 1,741 | 1,761 | 1,805 |
| (−) Tax | 274 | 284 | 296 | 303 | 308 | — |
| (−) CapEx | 458 | 475 | 495 | 508 | 515 | — |
| (−) ΔWC | 304 | 69 | 81 | 53 | 28 | — |
| Free Cash Flow (FCF) | 571 | 836 | 837 | 876 | 910 | — |
| Peers' EBITDA Multiple | 12.1x | |||||
| Terminal Value | 21,789 | |||||
| WACC / Discount Rate | 7.13% | |||||
| Timing of FCF (mid year) | 0.5 | 1.5 | 2.5 | 3.5 | 4.5 | 5 |
| Present Value of FCF | 552 | 754 | 705 | 689 | 667 | 15,442 |
| Enterprise Value | 18,808 | |||||
| Projection Period | 3,367 | 17.9% | ||||
| Terminal Value | 15,442 | 82.1% | ||||
| (−) Current Net Debt | 537 | |||||
| Equity Value | 18,271 | |||||
| (÷) Outstanding Shares | 570M | |||||
| Fair Price | $32 | +32.0% | ||||
| WACC \ EV/EBITDA Exit Multiple | 8.1x | 10.1x | 12.1x | 14.1x | 16.1x |
|---|---|---|---|---|---|
| 5.1% | $25 | $30 | $35 | $40 | $45 |
| 6.1% | $24 | $29 | $34 | $38 | $43 |
| 7.1% | $23 | $28 | $32 | $37 | $41 |
| 8.1% | $22 | $26 | $31 | $35 | $39 |
| 9.1% | $21 | $25 | $29 | $33 | $38 |
Current price: $24.28. 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.