Reverse DCF

Read the market-implied growth hurdle sensitized across assumptions.

Assumptions

Share price$28

Shares mm601

Cash + ST inv. $mm$1,290

Debt $mm$134

FCF (TTM, ex-SBC) $mm$1,218

WACC illustrative8%

Exit multiple EV/FCF · illustrative13×

Market-implied FCF growth

Enterprise value

$15,672

mktcap + debt − cash

Entry EV/FCF

13×

vs 13× exit

Implied FCF growth · 5 yr

0%

Implied FCF growth · 10 yr

0%

Implied 5-yr growth WACC × Exit

WACC ↓ / Exit →	11×	12×	13×	14×	15×
6%	1%	-1%	-2%	-3%	-4%
7%	2%	0%	-1%	-2%	-3%
8%	3%	1%	0%	-1%	-2%
9%	4%	2%	1%	0%	-1%
10%	5%	3%	2%	1%	0%

Implied 10-yr growth WACC × Exit

WACC ↓ / Exit →	11×	12×	13×	14×	15×
6%	-1%	-1%	-2%	-2%	-3%
7%	0%	0%	-1%	-1%	-2%
8%	1%	1%	0%	0%	-1%
9%	2%	2%	1%	1%	0%
10%	3%	3%	2%	2%	1%

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$28

Normal EPS (TTM)$2.07

WACC illustrative8%

Result

Steady-state value

$26

no-growth EPS ÷ WACC

PVGO

$2

PVGO % of price

7%

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 CAGR62%

Return on incremental capital LTM ROIC proxy17%

Warranted multiple

Warranted EV/NOPAT

477×

at your base case

No-growth base

12×

1 ÷ WACC

Added by growth

+465×

ROIIC > WACC

Growth × ROIIC at your WACC & CAP

Growth ↓ / ROIIC →	15%	16%	17%	18%	19%
60%	375×	401×	424×	445×	463×
61%	398×	426×	450×	472×	491×
62%	422×	452×	477×	500×	521×
63%	448×	479×	506×	531×	553×
64%	475×	508×	537×	563×	586×

WACC × CAP at your growth & ROIIC

WACC ↓ / CAP →	8 yrs	9 yrs	10 yrs	11 yrs	12 yrs
6%	381×	580×	884×	1,349×	2,059×
7%	284×	428×	646×	975×	1,475×
8%	215×	320×	477×	714×	1,069×
9%	163×	240×	355×	526×	779×
10%	124×	181×	264×	386×	567×

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