Using an unlevered Free Cash Flow to Firm (FCFF) model, we project Tractor Supply Company's cash flows over 5 years with line-by-line expense modeling. Revenue is projected revenue growing from 5.2% to 5.7% 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 0, DPO 50, DIO 105). 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 13.5x to Year 6 EBITDA. After subtracting net debt, the equity value implies a fair price of $63.74 per share, suggesting TSCO is undervalued by 39.0% at the current price of $45.84.
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 | 1,911 | 2,029 | 2,173 | 2,308 | 2,439 | 2,500 |
| (−) Net Interest | 51 | 54 | 58 | 61 | 65 | 66 |
| (+) D&A | 767 | 815 | 845 | 891 | 944 | 968 |
| EBITDA | 2,729 | 2,898 | 3,076 | 3,261 | 3,449 | 3,535 |
| (−) Tax | 424 | 450 | 482 | 512 | 541 | — |
| (−) CapEx | 869 | 922 | 988 | 1,049 | 1,108 | — |
| (−) ΔWC | -124 | 98 | 121 | 112 | 110 | — |
| Free Cash Flow (FCF) | 1,560 | 1,428 | 1,485 | 1,588 | 1,689 | — |
| Peers' EBITDA Multiple | 13.5x | |||||
| Terminal Value | 47,650 | |||||
| WACC / Discount Rate | 7.50% | |||||
| Timing of FCF (mid year) | 0.5 | 1.5 | 2.5 | 3.5 | 4.5 | 5 |
| Present Value of FCF | 1,505 | 1,281 | 1,240 | 1,232 | 1,220 | 33,187 |
| Enterprise Value | 39,664 | |||||
| Projection Period | 6,477 | 16.3% | ||||
| Terminal Value | 33,187 | 83.7% | ||||
| (−) Current Net Debt | 5,749 | |||||
| Equity Value | 33,915 | |||||
| (÷) Outstanding Shares | 532M | |||||
| Fair Price | $64 | +39.0% | ||||
| WACC \ EV/EBITDA Exit Multiple | 9.5x | 11.5x | 13.5x | 15.5x | 17.5x |
|---|---|---|---|---|---|
| 5.5% | $50 | $60 | $70 | $81 | $91 |
| 6.5% | $48 | $57 | $67 | $77 | $86 |
| 7.5% | $45 | $54 | $64 | $73 | $82 |
| 8.5% | $43 | $52 | $61 | $69 | $78 |
| 9.5% | $41 | $49 | $58 | $66 | $75 |
Current price: $45.84. 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.