Using an unlevered Free Cash Flow to Firm (FCFF) model, we project QUALCOMM Incorporated's cash flows over 5 years with line-by-line expense modeling. Revenue is projected revenue growing from -1.1% to 7.2% 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 38, DPO 59, DIO 131). At a 8.8% WACC with mid-year discounting, the terminal value (87% of enterprise value) is derived by applying the industry peer median EV/EBITDA multiple of 25.5x to Year 6 EBITDA. After subtracting net debt, the equity value implies a fair price of $304.36 per share, suggesting QCOM is undervalued by 131.8% at the current price of $131.31.
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 | 11,653 | 11,742 | 12,549 | 13,862 | 14,857 | 15,228 |
| (−) Net Interest | 700 | 706 | 754 | 833 | 893 | 915 |
| (+) D&A | 1,567 | 1,542 | 1,445 | 1,535 | 1,747 | 1,790 |
| EBITDA | 13,920 | 13,990 | 14,749 | 16,231 | 17,496 | 17,934 |
| (−) Tax | 1,986 | 2,001 | 2,139 | 2,363 | 2,532 | — |
| (−) CapEx | 1,765 | 1,778 | 1,900 | 2,099 | 2,250 | — |
| (−) ΔWC | -1,239 | 63 | 576 | 936 | 709 | — |
| Free Cash Flow (FCF) | 11,408 | 10,147 | 10,134 | 10,832 | 12,005 | — |
| Peers' EBITDA Multiple | 25.5x | |||||
| Terminal Value | 457,315 | |||||
| WACC / Discount Rate | 8.76% | |||||
| Timing of FCF (mid year) | 0.5 | 1.5 | 2.5 | 3.5 | 4.5 | 5 |
| Present Value of FCF | 10,939 | 8,946 | 8,214 | 8,073 | 8,227 | 300,489 |
| Enterprise Value | 344,888 | |||||
| Projection Period | 44,399 | 12.9% | ||||
| Terminal Value | 300,489 | 87.1% | ||||
| (−) Current Net Debt | 8,530 | |||||
| Equity Value | 336,358 | |||||
| (÷) Outstanding Shares | 1105M | |||||
| Fair Price | $304 | +131.8% | ||||
| WACC \ EV/EBITDA Exit Multiple | 21.5x | 23.5x | 25.5x | 27.5x | 29.5x |
|---|---|---|---|---|---|
| 6.8% | $286 | $309 | $333 | $356 | $379 |
| 7.8% | $273 | $296 | $318 | $340 | $363 |
| 8.8% | $262 | $283 | $304 | $326 | $347 |
| 9.8% | $251 | $271 | $291 | $312 | $332 |
| 10.8% | $240 | $260 | $279 | $298 | $318 |
Current price: $131.31. 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.