Using an unlevered Free Cash Flow to Firm (FCFF) model, we project W. R. Berkley Corporation's cash flows over 5 years with line-by-line expense modeling. Revenue is projected revenue growing from -11.7% to 11.7% 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 202, DPO 23, DIO 60). At a 7.7% WACC with mid-year discounting, the terminal value (81% of enterprise value) is derived by applying the industry peer median EV/EBITDA multiple of 8.2x to Year 6 EBITDA. After subtracting net debt, the equity value implies a fair price of $55.31 per share, suggesting WRB is overvalued by 15.0% at the current price of $65.09.
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 | 2,020 | 2,118 | 2,233 | 2,494 | 2,785 | 2,854 |
| (−) Net Interest | 145 | 152 | 160 | 178 | 199 | 204 |
| (+) D&A | 90 | 95 | 103 | 113 | 115 | 118 |
| EBITDA | 2,255 | 2,365 | 2,496 | 2,785 | 3,099 | 3,176 |
| (−) Tax | 422 | 443 | 467 | 521 | 582 | — |
| (−) CapEx | 92 | 97 | 102 | 114 | 127 | — |
| (−) ΔWC | 1,603 | 398 | 466 | 1,060 | 1,184 | — |
| Free Cash Flow (FCF) | 137 | 1,427 | 1,461 | 1,090 | 1,206 | — |
| Peers' EBITDA Multiple | 8.2x | |||||
| Terminal Value | 26,172 | |||||
| WACC / Discount Rate | 7.71% | |||||
| Timing of FCF (mid year) | 0.5 | 1.5 | 2.5 | 3.5 | 4.5 | 5 |
| Present Value of FCF | 132 | 1,277 | 1,214 | 841 | 864 | 18,055 |
| Enterprise Value | 22,382 | |||||
| Projection Period | 4,327 | 19.3% | ||||
| Terminal Value | 18,055 | 80.7% | ||||
| (−) Current Net Debt | 300 | |||||
| Equity Value | 22,082 | |||||
| (÷) Outstanding Shares | 399M | |||||
| Fair Price | $55 | -15.0% | ||||
| WACC \ EV/EBITDA Exit Multiple | 4.2x | 6.2x | 8.2x | 10.2x | 12.2x |
|---|---|---|---|---|---|
| 5.7% | $36 | $48 | $60 | $72 | $84 |
| 6.7% | $35 | $46 | $58 | $69 | $81 |
| 7.7% | $33 | $44 | $55 | $66 | $77 |
| 8.7% | $32 | $43 | $53 | $63 | $74 |
| 9.7% | $31 | $41 | $51 | $61 | $71 |
Current price: $65.09. 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.