Using an unlevered Free Cash Flow to Firm (FCFF) model, we project United Rentals, Inc.'s cash flows over 5 years with line-by-line expense modeling. Revenue is projected revenue growing from 6.3% to 13.5% 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 59, DPO 40, DIO 9). At a 8.0% WACC with mid-year discounting, the terminal value (92% of enterprise value) is derived by applying the industry peer median EV/EBITDA multiple of 14.6x to Year 6 EBITDA. After subtracting net debt, the equity value implies a fair price of $1824.05 per share, suggesting URI is undervalued by 145.0% at the current price of $744.38.
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 | 3,692 | 3,960 | 4,258 | 4,831 | 5,481 | 5,618 |
| (−) Net Interest | 738 | 791 | 851 | 965 | 1,095 | 1,123 |
| (+) D&A | 3,923 | 4,296 | 4,644 | 4,998 | 5,498 | 5,636 |
| EBITDA | 8,353 | 9,047 | 9,753 | 10,795 | 12,074 | 12,376 |
| (−) Tax | 913 | 979 | 1,052 | 1,194 | 1,355 | — |
| (−) CapEx | 5,065 | 5,432 | 5,840 | 6,626 | 7,518 | — |
| (−) ΔWC | -121 | 134 | 149 | 287 | 326 | — |
| Free Cash Flow (FCF) | 2,497 | 2,502 | 2,711 | 2,687 | 2,876 | — |
| Peers' EBITDA Multiple | 14.6x | |||||
| Terminal Value | 180,818 | |||||
| WACC / Discount Rate | 8.03% | |||||
| Timing of FCF (mid year) | 0.5 | 1.5 | 2.5 | 3.5 | 4.5 | 5 |
| Present Value of FCF | 2,402 | 2,229 | 2,235 | 2,050 | 2,031 | 122,891 |
| Enterprise Value | 133,839 | |||||
| Projection Period | 10,947 | 8.2% | ||||
| Terminal Value | 122,891 | 91.8% | ||||
| (−) Current Net Debt | 16,018 | |||||
| Equity Value | 117,821 | |||||
| (÷) Outstanding Shares | 65M | |||||
| Fair Price | $1824 | +145.0% | ||||
| WACC \ EV/EBITDA Exit Multiple | 10.6x | 12.6x | 14.6x | 16.6x | 18.6x |
|---|---|---|---|---|---|
| 6.0% | $1446 | $1732 | $2018 | $2304 | $2590 |
| 7.0% | $1373 | $1646 | $1918 | $2191 | $2464 |
| 8.0% | $1303 | $1564 | $1824 | $2084 | $2345 |
| 9.0% | $1237 | $1486 | $1735 | $1983 | $2232 |
| 10.0% | $1175 | $1412 | $1650 | $1888 | $2125 |
Current price: $744.38. 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.