Using an unlevered Free Cash Flow to Firm (FCFF) model, we project Zebra Technologies Corporation's cash flows over 5 years with line-by-line expense modeling. Revenue is projected revenue growing from 11.2% to -1.0% 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 51, DPO 85, DIO 94). At a 8.5% WACC with mid-year discounting, the terminal value (77% of enterprise value) is derived by applying the industry peer median EV/EBITDA multiple of 13.7x to Year 6 EBITDA. After subtracting net debt, the equity value implies a fair price of $259.04 per share, suggesting ZBRA is undervalued by 26.2% at the current price of $205.27.
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 | 927 | 977 | 1,029 | 1,106 | 1,094 | 1,122 |
| (−) Net Interest | 103 | 109 | 115 | 123 | 122 | 125 |
| (+) D&A | 73 | 78 | 81 | 82 | 91 | 93 |
| EBITDA | 1,104 | 1,164 | 1,225 | 1,311 | 1,307 | 1,340 |
| (−) Tax | 152 | 160 | 168 | 181 | 179 | — |
| (−) CapEx | 84 | 89 | 94 | 101 | 99 | — |
| (−) ΔWC | 52 | 49 | 52 | 76 | -11 | — |
| Free Cash Flow (FCF) | 816 | 866 | 911 | 954 | 1,040 | — |
| Peers' EBITDA Multiple | 13.7x | |||||
| Terminal Value | 18,365 | |||||
| WACC / Discount Rate | 8.48% | |||||
| Timing of FCF (mid year) | 0.5 | 1.5 | 2.5 | 3.5 | 4.5 | 5 |
| Present Value of FCF | 784 | 767 | 743 | 718 | 721 | 12,228 |
| Enterprise Value | 15,960 | |||||
| Projection Period | 3,732 | 23.4% | ||||
| Terminal Value | 12,228 | 76.6% | ||||
| (−) Current Net Debt | 2,691 | |||||
| Equity Value | 13,269 | |||||
| (÷) Outstanding Shares | 51M | |||||
| Fair Price | $259 | +26.2% | ||||
| WACC \ EV/EBITDA Exit Multiple | 9.7x | 11.7x | 13.7x | 15.7x | 17.7x |
|---|---|---|---|---|---|
| 6.5% | $209 | $248 | $286 | $324 | $362 |
| 7.5% | $199 | $236 | $272 | $309 | $345 |
| 8.5% | $189 | $224 | $259 | $294 | $329 |
| 9.5% | $180 | $213 | $247 | $280 | $313 |
| 10.5% | $171 | $203 | $235 | $267 | $299 |
Current price: $205.27. 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.