Using an unlevered Free Cash Flow to Firm (FCFF) model, we project Pool Corporation's cash flows over 5 years with line-by-line expense modeling. Revenue is projected revenue growing from 2.2% to -0.0% 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 20, DPO 48, DIO 133). At a 9.1% WACC with mid-year discounting, the terminal value (86% of enterprise value) is derived by applying the industry peer median EV/EBITDA multiple of 22.6x to Year 6 EBITDA. After subtracting net debt, the equity value implies a fair price of $396.35 per share, suggesting POOL is undervalued by 97.5% at the current price of $200.65.
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 | 699 | 726 | 759 | 758 | 758 | 777 |
| (−) Net Interest | 40 | 42 | 44 | 44 | 44 | 45 |
| (+) D&A | 51 | 54 | 56 | 55 | 54 | 55 |
| EBITDA | 790 | 822 | 858 | 857 | 856 | 877 |
| (−) Tax | 163 | 169 | 177 | 177 | 176 | — |
| (−) CapEx | 51 | 53 | 55 | 55 | 55 | — |
| (−) ΔWC | 236 | 46 | 55 | -0 | -0 | — |
| Free Cash Flow (FCF) | 341 | 554 | 571 | 626 | 625 | — |
| Peers' EBITDA Multiple | 22.6x | |||||
| Terminal Value | 19,865 | |||||
| WACC / Discount Rate | 9.07% | |||||
| Timing of FCF (mid year) | 0.5 | 1.5 | 2.5 | 3.5 | 4.5 | 5 |
| Present Value of FCF | 326 | 487 | 460 | 462 | 423 | 12,867 |
| Enterprise Value | 15,024 | |||||
| Projection Period | 2,157 | 14.4% | ||||
| Terminal Value | 12,867 | 85.6% | ||||
| (−) Current Net Debt | 244 | |||||
| Equity Value | 14,781 | |||||
| (÷) Outstanding Shares | 37M | |||||
| Fair Price | $396 | +97.6% | ||||
| WACC \ EV/EBITDA Exit Multiple | 18.6x | 20.6x | 22.6x | 24.6x | 26.6x |
|---|---|---|---|---|---|
| 7.1% | $366 | $399 | $433 | $466 | $499 |
| 8.1% | $350 | $382 | $414 | $446 | $478 |
| 9.1% | $335 | $366 | $396 | $427 | $457 |
| 10.1% | $321 | $351 | $380 | $409 | $438 |
| 11.1% | $308 | $336 | $364 | $392 | $419 |
Current price: $200.65. 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.