Using an unlevered Free Cash Flow to Firm (FCFF) model, we project Walmart Inc.'s cash flows over 5 years with line-by-line expense modeling. Revenue is projected revenue growing from 5.0% to 4.3% 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 5, DPO 43, DIO 43). At a 6.7% WACC with mid-year discounting, the terminal value (87% of enterprise value) is derived by applying the industry peer median EV/EBITDA multiple of 12.6x to Year 6 EBITDA. After subtracting net debt, the equity value implies a fair price of $66.54 per share, suggesting WMT is overvalued by 45.6% at the current price of $122.25.
Adjust parameters to explore scenarios. Changes are for exploration only and do not affect saved valuations.
| 2027 | 2028 | 2029 | 2030 | 2031 | Terminal | |
|---|---|---|---|---|---|---|
| Profit Before Tax | 27,889 | 29,205 | 30,642 | 31,669 | 33,026 | 33,852 |
| (−) Net Interest | 2,850 | 2,984 | 3,131 | 3,236 | 3,375 | 3,459 |
| (+) D&A | 14,870 | 16,635 | 17,857 | 18,554 | 18,778 | 19,248 |
| EBITDA | 45,609 | 48,824 | 51,630 | 53,459 | 55,179 | 56,559 |
| (−) Tax | 7,386 | 7,735 | 8,115 | 8,387 | 8,747 | — |
| (−) CapEx | 21,930 | 22,964 | 24,095 | 24,902 | 25,969 | — |
| (−) ΔWC | 3,293 | 484 | 529 | 378 | 499 | — |
| Free Cash Flow (FCF) | 13,000 | 17,641 | 18,891 | 19,792 | 19,964 | — |
| Peers' EBITDA Multiple | 12.6x | |||||
| Terminal Value | 713,203 | |||||
| WACC / Discount Rate | 6.74% | |||||
| Timing of FCF (mid year) | 0.5 | 1.5 | 2.5 | 3.5 | 4.5 | 5 |
| Present Value of FCF | 12,583 | 15,998 | 16,050 | 15,754 | 14,888 | 514,812 |
| Enterprise Value | 590,085 | |||||
| Projection Period | 75,273 | 12.8% | ||||
| Terminal Value | 514,812 | 87.2% | ||||
| (−) Current Net Debt | 56,368 | |||||
| Equity Value | 533,717 | |||||
| (÷) Outstanding Shares | 8022M | |||||
| Fair Price | $67 | -45.6% | ||||
| WACC \ EV/EBITDA Exit Multiple | 8.6x | 10.6x | 12.6x | 14.6x | 16.6x |
|---|---|---|---|---|---|
| 4.7% | $51 | $62 | $73 | $85 | $96 |
| 5.7% | $49 | $59 | $70 | $81 | $91 |
| 6.7% | $46 | $56 | $67 | $77 | $87 |
| 7.7% | $44 | $54 | $63 | $73 | $83 |
| 8.7% | $42 | $51 | $60 | $70 | $79 |
Current price: $122.25. 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.