Using an unlevered Free Cash Flow to Firm (FCFF) model, we project Steel Dynamics, Inc.'s cash flows over 5 years with line-by-line expense modeling. Revenue is projected revenue growing from 15.8% to -0.3% 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 33, DPO 28, DIO 81). At a 7.9% WACC with mid-year discounting, the terminal value (85% of enterprise value) is derived by applying the industry peer median EV/EBITDA multiple of 16.6x to Year 6 EBITDA. After subtracting net debt, the equity value implies a fair price of $502.66 per share, suggesting STLD is undervalued by 188.9% at the current price of $173.97.
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 | 3,683 | 3,788 | 3,934 | 4,192 | 4,178 | 4,283 |
| (−) Net Interest | 77 | 79 | 82 | 88 | 88 | 90 |
| (+) D&A | 1,278 | 1,365 | 1,479 | 1,455 | 1,410 | 1,445 |
| EBITDA | 5,038 | 5,232 | 5,495 | 5,735 | 5,675 | 5,817 |
| (−) Tax | 820 | 843 | 875 | 933 | 930 | — |
| (−) CapEx | 1,441 | 1,481 | 1,538 | 1,639 | 1,634 | — |
| (−) ΔWC | 113 | 122 | 170 | 301 | -16 | — |
| Free Cash Flow (FCF) | 2,665 | 2,785 | 2,911 | 2,861 | 3,127 | — |
| Peers' EBITDA Multiple | 16.6x | |||||
| Terminal Value | 96,625 | |||||
| WACC / Discount Rate | 7.87% | |||||
| Timing of FCF (mid year) | 0.5 | 1.5 | 2.5 | 3.5 | 4.5 | 5 |
| Present Value of FCF | 2,566 | 2,486 | 2,409 | 2,195 | 2,224 | 66,154 |
| Enterprise Value | 78,033 | |||||
| Projection Period | 11,880 | 15.2% | ||||
| Terminal Value | 66,154 | 84.8% | ||||
| (−) Current Net Debt | 3,441 | |||||
| Equity Value | 74,592 | |||||
| (÷) Outstanding Shares | 148M | |||||
| Fair Price | $503 | +188.9% | ||||
| WACC \ EV/EBITDA Exit Multiple | 12.6x | 14.6x | 16.6x | 18.6x | 20.6x |
|---|---|---|---|---|---|
| 5.9% | $432 | $491 | $550 | $609 | $668 |
| 6.9% | $413 | $470 | $526 | $582 | $638 |
| 7.9% | $395 | $449 | $503 | $556 | $610 |
| 8.9% | $378 | $430 | $481 | $532 | $583 |
| 9.9% | $362 | $411 | $460 | $509 | $558 |
Current price: $173.97. 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.