Using an unlevered Free Cash Flow to Firm (FCFF) model, we project PG&E Corporation's cash flows over 5 years with line-by-line expense modeling. Revenue is projected revenue growing from 7.0% to 3.7% 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 163, DPO 56, DIO 16). At a 5.6% WACC with mid-year discounting, the terminal value (93% of enterprise value) is derived by applying the industry peer median EV/EBITDA multiple of 12.7x to Year 6 EBITDA. After subtracting net debt, the equity value implies a fair price of $49.95 per share, suggesting PCG is undervalued by 187.8% at the current price of $17.36.
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 | 977 | 1,008 | 1,040 | 1,072 | 1,111 | 1,139 |
| (−) Net Interest | 2,822 | 2,911 | 3,004 | 3,096 | 3,209 | 3,289 |
| (+) D&A | 9,829 | 10,541 | 10,946 | 11,399 | 11,794 | 12,089 |
| EBITDA | 13,627 | 14,460 | 14,990 | 15,566 | 16,114 | 16,517 |
| (−) Tax | 0 | 0 | 0 | 0 | 0 | — |
| (−) CapEx | 11,253 | 11,608 | 11,978 | 12,344 | 12,797 | — |
| (−) ΔWC | 334 | 302 | 314 | 311 | 384 | — |
| Free Cash Flow (FCF) | 2,041 | 2,551 | 2,697 | 2,911 | 2,933 | — |
| Peers' EBITDA Multiple | 12.7x | |||||
| Terminal Value | 209,271 | |||||
| WACC / Discount Rate | 5.63% | |||||
| Timing of FCF (mid year) | 0.5 | 1.5 | 2.5 | 3.5 | 4.5 | 5 |
| Present Value of FCF | 1,985 | 2,350 | 2,352 | 2,404 | 2,293 | 159,170 |
| Enterprise Value | 170,553 | |||||
| Projection Period | 11,384 | 6.7% | ||||
| Terminal Value | 159,170 | 93.3% | ||||
| (−) Current Net Debt | 60,622 | |||||
| Equity Value | 109,931 | |||||
| (÷) Outstanding Shares | 2202M | |||||
| Fair Price | $50 | +187.7% | ||||
| WACC \ EV/EBITDA Exit Multiple | 8.7x | 10.7x | 12.7x | 14.7x | 16.7x |
|---|---|---|---|---|---|
| 3.6% | $32 | $45 | $57 | $70 | $83 |
| 4.6% | $30 | $42 | $54 | $66 | $78 |
| 5.6% | $27 | $39 | $50 | $61 | $73 |
| 6.6% | $25 | $36 | $47 | $57 | $68 |
| 7.6% | $22 | $33 | $43 | $54 | $64 |
Current price: $17.36. 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.