Using an unlevered Free Cash Flow to Firm (FCFF) model, we project Veralto Corporation's cash flows over 5 years with line-by-line expense modeling. Revenue is projected revenue growing from 6.2% to 4.0% 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 75, DIO 54). At a 8.5% WACC with mid-year discounting, the terminal value (80% of enterprise value) is derived by applying the industry peer median EV/EBITDA multiple of 16.6x to Year 6 EBITDA. After subtracting net debt, the equity value implies a fair price of $88.72 per share, suggesting VLTO is fairly valued by 2.7% at the current price of $86.37.
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 | 1,271 | 1,339 | 1,416 | 1,435 | 1,493 | 1,530 |
| (−) Net Interest | 53 | 56 | 59 | 60 | 62 | 64 |
| (+) D&A | 52 | 53 | 59 | 62 | 64 | 66 |
| EBITDA | 1,376 | 1,447 | 1,534 | 1,556 | 1,619 | 1,659 |
| (−) Tax | 276 | 290 | 307 | 311 | 324 | — |
| (−) CapEx | 60 | 63 | 67 | 68 | 70 | — |
| (−) ΔWC | 17 | 43 | 49 | 12 | 37 | — |
| Free Cash Flow (FCF) | 1,024 | 1,051 | 1,111 | 1,165 | 1,188 | — |
| Peers' EBITDA Multiple | 16.6x | |||||
| Terminal Value | 27,579 | |||||
| WACC / Discount Rate | 8.51% | |||||
| Timing of FCF (mid year) | 0.5 | 1.5 | 2.5 | 3.5 | 4.5 | 5 |
| Present Value of FCF | 983 | 930 | 906 | 875 | 823 | 18,331 |
| Enterprise Value | 22,848 | |||||
| Projection Period | 4,516 | 19.8% | ||||
| Terminal Value | 18,331 | 80.2% | ||||
| (−) Current Net Debt | 642 | |||||
| Equity Value | 22,206 | |||||
| (÷) Outstanding Shares | 250M | |||||
| Fair Price | $89 | +2.7% | ||||
| WACC \ EV/EBITDA Exit Multiple | 12.6x | 14.6x | 16.6x | 18.6x | 20.6x |
|---|---|---|---|---|---|
| 6.5% | $77 | $87 | $97 | $106 | $116 |
| 7.5% | $74 | $83 | $93 | $102 | $111 |
| 8.5% | $71 | $80 | $89 | $98 | $106 |
| 9.5% | $68 | $77 | $85 | $93 | $102 |
| 10.5% | $65 | $74 | $82 | $90 | $98 |
Current price: $86.37. 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.