Discounted Cash Flow

Morgan Stanley

MS · Based on 10 years of SEC filings

Average annual growth rates

Metric 10-Year 5-Year 3-Year
Sales
Free Cash Flow
Average (FCF & NI)
Net Income

Average annual growth is the mean year-over-year change across each period.

Endpoint CAGR (better for long term trend)

Metric 10-Year 5-Year 3-Year
Sales
Free Cash Flow
Average (FCF & NI)
Net Income

Endpoint CAGR is the compound annual rate from the first to last year in each period.

Projections use average year-over-year growth. Change this in Settings.

Projected growth rate

Free cash flow growth
10-year: — 5-year: — 3-year: —
Averaged growth (FCF & NI)
10-year: — 5-year: — 3-year: —
Net income growth
10-year: — 5-year: — 3-year: —
Sales growth (not added to calculations)
10-year: — 5-year: — 3-year: —

Click a greyed-out slider to switch metrics. Slide between the 10-year, 5-year, and 3-year historic growth rates for FCF, net income, or their average.

%
%

Historical inputs (10 fiscal years)

YEAR Sales Net Income Free Cash Flow Net Margin EPS (diluted)
2016 $34.6b $6.0b $2.4b 17.3% $2.98
2017 $37.9b (9.6%) $6.1b (2.2%) $-4.5b (-284.1%) 16.1% (-6.7%) $3.14 (5.4%)
2018 $40.1b (5.7%) $8.7b (43.2%) $7.3b (262.2%) 21.8% (35.4%) $4.81 (53.2%)
2019 $41.4b (3.3%) $9.0b (3.4%) $40.8b (458.2%) 21.8% (0.1%) $5.26 (9.4%)
2020 $48.2b (16.4%) $11.0b (21.6%) $-25.2b (-161.9%) 22.8% (4.5%) $6.55 (24.5%)
2021 $59.8b (24.0%) $15.0b (36.7%) $34.0b (234.6%) 25.2% (10.3%) $8.16 (24.6%)
2022 $53.7b (-10.2%) $11.0b (-26.6%) $-9.5b (-127.9%) 20.6% (-18.3%) $6.23 (-23.7%)
2023 $54.1b (0.9%) $9.1b (-17.6%) $-36.9b (-290.0%) 16.8% (-18.3%) $5.24 (-15.9%)
2024 $61.8b (14.1%) $13.4b (47.4%) $-2.1b (94.3%) 21.7% (29.2%) $8.04 (53.4%)
2025 $70.6b (14.4%) $16.9b (25.9%) $-20.8b (-889.9%) 23.9% (10.1%) $10.32 (28.4%)

Base FCF: (latest fiscal year)

Discount rate: %

Terminal growth:

Projection period: years

Alt A decline yrs:

Alt B total yrs:

Values abbreviated: b = billions, m = millions, k = thousands.

Projected cash flows

Year Projected cash flow Discount Factor Present Value

PV of projected FCF:

Terminal FCF:

Terminal value:

PV of terminal value:

Enterprise value (DCF):

DCF price per share:

Current price:

Alternative DCF Models

Model Fair Value Upside PV(FCFs) PV(Terminal) Total Years
Standard (10yr→TV) 10 + TV
Alt A (Gradual Decline)
Alt B (30yr Hard Stop) N/A

This is a simplified DCF model for illustration. It uses reported free cash flow, a single growth assumption, fixed WACC, and a Gordon Growth terminal value. It is not investment advice.

+ 10YR Financials Balance Sheet (10YR) Cash Flow (10YR) DCF Model