Company Analysis - Apple Inc. (AAPL)
Key financial metrics and valuation assumptions
Current Stock Price
$199.95
Market Cap
$3,088B
Shares Outstanding
15,441M
Current FCF
$99,584M
FCF Growth Rate
8.5%
Terminal Growth
3.0%
Valuation Results
DCF analysis fair value estimation
WACC
12.0%
Enterprise Value
$3,245B
Equity Value
$3,088B
Terminal Value
$2,456B
PV of FCF (5Y)
$632B
Fair Value Per Share
$214.29
Key Assumptions
WACC components & ratios
Risk-Free Rate
4.5%
Market Risk Premium
6.0%
Beta
1.25
Tax Rate
21%
Debt/Equity Ratio
0.15
Cost of Debt
3.5%
Cost of Equity
12.0%
Projection Years
5 Years
📊 Free Cash Flow Projections
Year-by-year breakdown of projected cash flows and present values
| Year | 2025 | 2026 | 2027 | 2028 | 2029 | Terminal |
|---|---|---|---|---|---|---|
| Free Cash Flow ($M) | 108,098 | 117,287 | 127,256 | 138,073 | 149,809 | 154,303 |
| Growth Rate | 8.5% | 8.5% | 8.5% | 8.5% | 8.5% | 3.0% |
| Discount Factor | 0.893 | 0.797 | 0.712 | 0.636 | 0.568 | - |
| Present Value ($M) | 96,532 | 93,500 | 90,606 | 87,842 | 85,203 | 1,546,250 |
🔄 Sensitivity Analysis
Fair value sensitivity to changes in WACC and terminal growth rate
WACC / Terminal
2.0%
2.5%
3.0%
3.5%
4.0%
10.0%
$234
$251
$271
$296
$327
11.0%
$210
$224
$240
$259
$282
12.0%
$190
$200
$214
$229
$247
13.0%
$173
$182
$192
$204
$218
14.0%
$158
$166
$175
$185
$196
📈 DCF Model Overview
The Discounted Cash Flow (DCF) model estimates a company's intrinsic value by projecting future free cash flows and discounting them to present value using the Weighted Average Cost of Capital (WACC).
- Projects free cash flows for 5-10 years
- Calculates terminal value using perpetual growth
- Discounts all cash flows to present value
- Provides fair value per share estimate
⚖️ Key Assumptions
DCF models are highly sensitive to key assumptions. Small changes in growth rates or discount rates can significantly impact valuation results.
- Free cash flow growth rate (typically 5-15%)
- Terminal growth rate (usually 2-4%)
- WACC discount rate (varies by company risk)
- Projection period (commonly 5-10 years)
🎯 Best Practices
To improve DCF accuracy, use conservative assumptions, conduct sensitivity analysis, and compare results with other valuation methods.
- Use multiple scenarios (bull, base, bear)
- Cross-check with comparable company analysis
- Consider industry-specific factors
- Update assumptions regularly