Using an unlevered Free Cash Flow to Firm (FCFF) model, we project Quanta Services, Inc.'s cash flows over 5 years with line-by-line expense modeling. Revenue is projected revenue growing from 17.9% to 13.3% 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 102, DPO 38, DIO 4). At a 9.0% WACC with mid-year discounting, the terminal value (93% of enterprise value) is derived by applying the industry peer median EV/EBITDA multiple of 16.9x to Year 6 EBITDA. After subtracting net debt, the equity value implies a fair price of $315.61 per share, suggesting PWR is overvalued by 42.7% at the current price of $550.34.
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 | 1,588 | 1,794 | 2,032 | 2,351 | 2,665 | 2,732 |
| (−) Net Interest | 263 | 297 | 336 | 389 | 441 | 452 |
| (+) D&A | 493 | 580 | 679 | 802 | 924 | 947 |
| EBITDA | 2,344 | 2,671 | 3,047 | 3,543 | 4,031 | 4,131 |
| (−) Tax | 383 | 433 | 490 | 567 | 643 | — |
| (−) CapEx | 821 | 927 | 1,050 | 1,215 | 1,377 | — |
| (−) ΔWC | -581 | 860 | 993 | 1,334 | 1,312 | — |
| Free Cash Flow (FCF) | 1,721 | 451 | 514 | 426 | 699 | — |
| Peers' EBITDA Multiple | 16.9x | |||||
| Terminal Value | 69,739 | |||||
| WACC / Discount Rate | 8.98% | |||||
| Timing of FCF (mid year) | 0.5 | 1.5 | 2.5 | 3.5 | 4.5 | 5 |
| Present Value of FCF | 1,649 | 396 | 415 | 315 | 475 | 45,375 |
| Enterprise Value | 48,624 | |||||
| Projection Period | 3,249 | 6.7% | ||||
| Terminal Value | 45,375 | 93.3% | ||||
| (−) Current Net Debt | 748 | |||||
| Equity Value | 47,876 | |||||
| (÷) Outstanding Shares | 152M | |||||
| Fair Price | $316 | -42.6% | ||||
| WACC \ EV/EBITDA Exit Multiple | 12.9x | 14.9x | 16.9x | 18.9x | 20.9x |
|---|---|---|---|---|---|
| 7.0% | $268 | $306 | $345 | $384 | $423 |
| 8.0% | $256 | $293 | $330 | $367 | $404 |
| 9.0% | $245 | $280 | $316 | $351 | $387 |
| 10.0% | $234 | $268 | $302 | $336 | $370 |
| 11.0% | $224 | $257 | $289 | $321 | $354 |
Current price: $550.34. 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.