Using an unlevered Free Cash Flow to Firm (FCFF) model, we project UnitedHealth Group Incorporated's cash flows over 5 years with line-by-line expense modeling. Revenue is projected revenue growing from -1.4% to 5.9% 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 65, DIO 60). At a 7.4% WACC with mid-year discounting, the terminal value (76% of enterprise value) is derived by applying the industry peer median EV/EBITDA multiple of 11.6x to Year 6 EBITDA. After subtracting net debt, the equity value implies a fair price of $1148.39 per share, suggesting UNH is undervalued by 328.6% at the current price of $267.91.
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 | 75,178 | 77,352 | 82,004 | 86,817 | 91,915 | 94,213 |
| (−) Net Interest | 3,502 | 3,603 | 3,819 | 4,044 | 4,281 | 4,388 |
| (+) D&A | 3,153 | 3,423 | 3,646 | 3,800 | 3,979 | 4,079 |
| EBITDA | 81,833 | 84,378 | 89,470 | 94,660 | 100,175 | 102,680 |
| (−) Tax | 14,974 | 15,407 | 16,334 | 17,293 | 18,308 | — |
| (−) CapEx | 3,807 | 3,917 | 4,153 | 4,397 | 4,655 | — |
| (−) ΔWC | 20,562 | 1,019 | 2,181 | 2,256 | 2,390 | — |
| Free Cash Flow (FCF) | 42,489 | 64,034 | 66,802 | 70,715 | 74,822 | — |
| Peers' EBITDA Multiple | 11.6x | |||||
| Terminal Value | 1,194,167 | |||||
| WACC / Discount Rate | 7.42% | |||||
| Timing of FCF (mid year) | 0.5 | 1.5 | 2.5 | 3.5 | 4.5 | 5 |
| Present Value of FCF | 40,996 | 57,519 | 55,862 | 55,051 | 54,227 | 835,049 |
| Enterprise Value | 1,098,702 | |||||
| Projection Period | 263,654 | 24.0% | ||||
| Terminal Value | 835,049 | 76.0% | ||||
| (−) Current Net Debt | 54,024 | |||||
| Equity Value | 1,044,678 | |||||
| (÷) Outstanding Shares | 910M | |||||
| Fair Price | $1148 | +328.5% | ||||
| WACC \ EV/EBITDA Exit Multiple | 7.6x | 9.6x | 11.6x | 13.6x | 15.6x |
|---|---|---|---|---|---|
| 5.4% | $907 | $1080 | $1253 | $1427 | $1600 |
| 6.4% | $869 | $1034 | $1199 | $1365 | $1530 |
| 7.4% | $833 | $991 | $1148 | $1306 | $1464 |
| 8.4% | $799 | $949 | $1100 | $1251 | $1401 |
| 9.4% | $766 | $910 | $1054 | $1198 | $1342 |
Current price: $267.91. 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.