Using an unlevered Free Cash Flow to Firm (FCFF) model, we project VeriSign, Inc.'s cash flows over 5 years with line-by-line expense modeling. Revenue is projected revenue growing from 4.5% 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 3, DPO 21, DIO 60). At a 9.1% WACC with mid-year discounting, the terminal value (70% of enterprise value) is derived by applying the industry peer median EV/EBITDA multiple of 10.0x to Year 6 EBITDA. After subtracting net debt, the equity value implies a fair price of $141.88 per share, suggesting VRSN is overvalued by 43.4% at the current price of $250.80.
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 | 1,066 | 1,119 | 1,235 | 1,306 | 1,380 | 1,414 |
| (−) Net Interest | 90 | 95 | 105 | 111 | 117 | 120 |
| (+) D&A | 35 | 33 | 37 | 37 | 42 | 43 |
| EBITDA | 1,192 | 1,247 | 1,376 | 1,453 | 1,539 | 1,577 |
| (−) Tax | 182 | 191 | 211 | 223 | 235 | — |
| (−) CapEx | 42 | 44 | 49 | 52 | 54 | — |
| (−) ΔWC | 37 | 2 | 4 | 3 | 3 | — |
| Free Cash Flow (FCF) | 930 | 1,010 | 1,113 | 1,177 | 1,246 | — |
| Peers' EBITDA Multiple | 10.0x | |||||
| Terminal Value | 15,802 | |||||
| WACC / Discount Rate | 9.06% | |||||
| Timing of FCF (mid year) | 0.5 | 1.5 | 2.5 | 3.5 | 4.5 | 5 |
| Present Value of FCF | 891 | 887 | 896 | 868 | 843 | 10,240 |
| Enterprise Value | 14,625 | |||||
| Projection Period | 4,385 | 30.0% | ||||
| Terminal Value | 10,240 | 70.0% | ||||
| (−) Current Net Debt | 1,490 | |||||
| Equity Value | 13,135 | |||||
| (÷) Outstanding Shares | 93M | |||||
| Fair Price | $142 | -43.4% | ||||
| WACC \ EV/EBITDA Exit Multiple | 6.0x | 8.0x | 10.0x | 12.0x | 14.0x |
|---|---|---|---|---|---|
| 7.1% | $106 | $131 | $155 | $179 | $203 |
| 8.1% | $102 | $125 | $148 | $171 | $194 |
| 9.1% | $98 | $120 | $142 | $164 | $186 |
| 10.1% | $94 | $115 | $136 | $157 | $178 |
| 11.1% | $90 | $110 | $130 | $150 | $171 |
Current price: $250.80. 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.