Using an unlevered Free Cash Flow to Firm (FCFF) model, we project Visa Inc.'s cash flows over 5 years with line-by-line expense modeling. Revenue is projected revenue growing from 11.6% 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 59, DPO 23, DIO 60). At a 7.8% WACC with mid-year discounting, the terminal value (77% of enterprise value) is derived by applying the industry peer median EV/EBITDA multiple of 12.2x to Year 6 EBITDA. After subtracting net debt, the equity value implies a fair price of $262.52 per share, suggesting V is fairly valued by 14.0% at the current price of $305.37.
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 | 30,285 | 33,436 | 36,801 | 41,333 | 43,695 | 44,787 |
| (−) Net Interest | 821 | 906 | 998 | 1,120 | 1,184 | 1,214 |
| (+) D&A | 1,095 | 1,252 | 1,386 | 1,537 | 1,692 | 1,734 |
| EBITDA | 32,201 | 35,594 | 39,185 | 43,990 | 46,571 | 47,735 |
| (−) Tax | 5,653 | 6,241 | 6,869 | 7,715 | 8,155 | — |
| (−) CapEx | 1,490 | 1,645 | 1,810 | 2,033 | 2,149 | — |
| (−) ΔWC | 1,357 | 845 | 902 | 1,215 | 633 | — |
| Free Cash Flow (FCF) | 23,702 | 26,864 | 29,604 | 33,028 | 35,633 | — |
| Peers' EBITDA Multiple | 12.2x | |||||
| Terminal Value | 581,418 | |||||
| WACC / Discount Rate | 7.83% | |||||
| Timing of FCF (mid year) | 0.5 | 1.5 | 2.5 | 3.5 | 4.5 | 5 |
| Present Value of FCF | 22,825 | 23,993 | 24,521 | 25,371 | 25,386 | 398,908 |
| Enterprise Value | 521,006 | |||||
| Projection Period | 122,098 | 23.4% | ||||
| Terminal Value | 398,908 | 76.6% | ||||
| (−) Current Net Debt | 5,017 | |||||
| Equity Value | 515,989 | |||||
| (÷) Outstanding Shares | 1966M | |||||
| Fair Price | $262 | -14.1% | ||||
| WACC \ EV/EBITDA Exit Multiple | 8.2x | 10.2x | 12.2x | 14.2x | 16.2x |
|---|---|---|---|---|---|
| 5.8% | $212 | $249 | $286 | $322 | $359 |
| 6.8% | $204 | $239 | $274 | $309 | $344 |
| 7.8% | $196 | $229 | $263 | $296 | $329 |
| 8.8% | $188 | $220 | $252 | $284 | $316 |
| 9.8% | $181 | $211 | $242 | $272 | $303 |
Current price: $305.37. 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.