Using an unlevered Free Cash Flow to Firm (FCFF) model, we project Stryker Corporation's cash flows over 5 years with line-by-line expense modeling. Revenue is projected revenue growing from 8.9% to 8.1% 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 65, DPO 69, DIO 205). At a 7.5% WACC with mid-year discounting, the terminal value (84% of enterprise value) is derived by applying the industry peer median EV/EBITDA multiple of 17.4x to Year 6 EBITDA. After subtracting net debt, the equity value implies a fair price of $326.79 per share, suggesting SYK is fairly valued by 1.9% at the current price of $333.22.
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 | 5,416 | 5,874 | 6,372 | 6,951 | 7,513 | 7,700 |
| (−) Net Interest | 531 | 575 | 624 | 681 | 736 | 754 |
| (+) D&A | 641 | 705 | 770 | 854 | 919 | 942 |
| EBITDA | 6,587 | 7,154 | 7,767 | 8,486 | 9,168 | 9,397 |
| (−) Tax | 876 | 950 | 1,031 | 1,125 | 1,216 | — |
| (−) CapEx | 844 | 915 | 993 | 1,083 | 1,171 | — |
| (−) ΔWC | -592 | 740 | 806 | 936 | 907 | — |
| Free Cash Flow (FCF) | 5,459 | 4,548 | 4,936 | 5,342 | 5,874 | — |
| Peers' EBITDA Multiple | 17.4x | |||||
| Terminal Value | 163,226 | |||||
| WACC / Discount Rate | 7.46% | |||||
| Timing of FCF (mid year) | 0.5 | 1.5 | 2.5 | 3.5 | 4.5 | 5 |
| Present Value of FCF | 5,266 | 4,082 | 4,123 | 4,152 | 4,249 | 113,883 |
| Enterprise Value | 135,755 | |||||
| Projection Period | 21,873 | 16.1% | ||||
| Terminal Value | 113,883 | 83.9% | ||||
| (−) Current Net Debt | 10,848 | |||||
| Equity Value | 124,907 | |||||
| (÷) Outstanding Shares | 382M | |||||
| Fair Price | $327 | -1.9% | ||||
| WACC \ EV/EBITDA Exit Multiple | 13.4x | 15.4x | 17.4x | 19.4x | 21.4x |
|---|---|---|---|---|---|
| 5.5% | $283 | $321 | $359 | $396 | $434 |
| 6.5% | $270 | $306 | $342 | $378 | $414 |
| 7.5% | $258 | $292 | $327 | $361 | $395 |
| 8.5% | $247 | $279 | $312 | $345 | $378 |
| 9.5% | $236 | $267 | $298 | $329 | $361 |
Current price: $333.22. 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.