Using an unlevered Free Cash Flow to Firm (FCFF) model, we project Ventas, Inc.'s cash flows over 5 years with line-by-line expense modeling. Revenue is projected revenue growing from 12.0% to 11.1% 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 42, DPO 145, DIO 60). At a 7.3% WACC with mid-year discounting, the terminal value (79% of enterprise value) is derived by applying the industry peer median EV/EBITDA multiple of 14.8x to Year 6 EBITDA. After subtracting net debt, the equity value implies a fair price of $62.10 per share, suggesting VTR is overvalued by 24.6% at the current price of $82.33.
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 | 1,241 | 1,342 | 1,434 | 1,475 | 1,638 | 1,679 |
| (−) Net Interest | 762 | 824 | 880 | 905 | 1,006 | 1,031 |
| (+) D&A | 262 | 298 | 333 | 365 | 396 | 406 |
| EBITDA | 2,266 | 2,465 | 2,647 | 2,745 | 3,040 | 3,116 |
| (−) Tax | 0 | 0 | 0 | 0 | 0 | — |
| (−) CapEx | 365 | 395 | 422 | 434 | 482 | — |
| (−) ΔWC | 573 | -21 | -19 | -8 | -33 | — |
| Free Cash Flow (FCF) | 1,328 | 2,091 | 2,244 | 2,320 | 2,591 | — |
| Peers' EBITDA Multiple | 14.8x | |||||
| Terminal Value | 46,178 | |||||
| WACC / Discount Rate | 7.30% | |||||
| Timing of FCF (mid year) | 0.5 | 1.5 | 2.5 | 3.5 | 4.5 | 5 |
| Present Value of FCF | 1,282 | 1,881 | 1,882 | 1,813 | 1,887 | 32,461 |
| Enterprise Value | 41,205 | |||||
| Projection Period | 8,744 | 21.2% | ||||
| Terminal Value | 32,461 | 78.8% | ||||
| (−) Current Net Debt | 12,479 | |||||
| Equity Value | 28,726 | |||||
| (÷) Outstanding Shares | 463M | |||||
| Fair Price | $62 | -24.6% | ||||
| WACC \ EV/EBITDA Exit Multiple | 10.8x | 12.8x | 14.8x | 16.8x | 18.8x |
|---|---|---|---|---|---|
| 5.3% | $49 | $60 | $70 | $80 | $91 |
| 6.3% | $46 | $56 | $66 | $76 | $86 |
| 7.3% | $43 | $53 | $62 | $72 | $81 |
| 8.3% | $40 | $49 | $58 | $68 | $77 |
| 9.3% | $38 | $46 | $55 | $64 | $72 |
Current price: $82.33. 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.