Reverse DCF

Read the market-implied growth hurdle sensitized across assumptions.

Assumptions

Share price$1567

Shares mm146

Cash + ST inv. $mm$4,762

Debt $mm$0

FCF (TTM, ex-SBC) $mm$11,262

WACC illustrative8%

Exit multiple EV/FCF · illustrative20×

Market-implied FCF growth

Enterprise value

$224,020

mktcap + debt − cash

Entry EV/FCF

20×

vs 20× exit

Implied FCF growth · 5 yr

3%

Implied FCF growth · 10 yr

3%

Implied 5-yr growth WACC × Exit

WACC ↓ / Exit →	18×	19×	20×	21×	22×
6%	3%	2%	1%	0%	-1%
7%	4%	3%	2%	1%	0%
8%	5%	4%	3%	2%	1%
9%	6%	5%	4%	3%	2%
10%	7%	6%	5%	4%	3%

Implied 10-yr growth WACC × Exit

WACC ↓ / Exit →	18×	19×	20×	21×	22×
6%	2%	1%	1%	1%	0%
7%	3%	2%	2%	1%	1%
8%	4%	3%	3%	2%	2%
9%	5%	4%	4%	3%	3%
10%	6%	5%	5%	4%	4%

Grounded in Mauboussin's Everything Is a DCF Model and Competitive Advantage Period.

PVGO

Size the market-implied growth embedded into the price.

Assumptions

Share price$1567

Normal EPS (TTM)$78.08

WACC illustrative8%

Result

Steady-state value

$976

no-growth EPS ÷ WACC

PVGO

$591

PVGO % of price

38%

Grounded in Mauboussin's Opportunities and Expectations.

Valuation Multiple

The warranted valuation multiple sensitized across assumptions.

Base case

WACC illustrative8%

Competitive Advantage Period illustrative10 yrs

Growth 3yr sales CAGR49%

Return on incremental capital LTM ROIC proxy81%

Warranted multiple

Warranted EV/NOPAT

361×

at your base case

No-growth base

12×

1 ÷ WACC

Added by growth

+349×

ROIIC > WACC

Growth × ROIIC at your WACC & CAP

Growth ↓ / ROIIC →	79%	80%	81%	82%	83%
47%	317×	317×	318×	318×	319×
48%	338×	338×	339×	339×	340×
49%	360×	361×	361×	362×	362×
50%	384×	384×	385×	385×	386×
51%	409×	409×	410×	411×	411×

WACC × CAP at your growth & ROIIC

WACC ↓ / CAP →	8 yrs	9 yrs	10 yrs	11 yrs	12 yrs
6%	282×	397×	559×	787×	1,107×
7%	228×	319×	445×	620×	864×
8%	189×	261×	361×	499×	689×
9%	159×	218×	298×	409×	559×
10%	135×	184×	250×	339×	460×

Grounded in Mauboussin's The Math of Value and Growth — value-neutral at ROIIC = WACC.