Verizon Communications Inc. (VZ) Discounted Free Cash Flow - Perpetuity - Discounting Cash Flows
VZ
Verizon Communications Inc.
VZ (NYSE)

Estimated Value

USD

Market Price USD

* Values are not guaranteed, please do your own
research before making investment decisions.

Discounted Free Cash Flow Model

Discounted Free Cash Flow calculates the value of a share based on the company's estimated future Free Cash Flow figures.

See our GitHub Model Documentation

Interactive Assumptions

Discount Rate

Discount Rate

Discount Rate = Equity Weight * Cost of Equity + Debt Weight * Cost of Debt * (1 - Tax Rate)

Calculated using Weighted Average Cost of Capital (WACC) formula. It represents a firm’s average after-tax cost of capital from all sources, including common stock, preferred stock, bonds, and other forms of debt.

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Cost of Equity

Cost of Equity = Risk Free Rate + Beta * Market Premium

The cost of equity is the theoretical rate of return that an equity investment should generate. It is calculated using the CAPM formula.

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Cost of Debt

Cost of Debt = Interest Expense / Total Debt

The cost of debt is the effective rate that a company pays on its debt, such as bonds and loans.

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Equity & Debt Weights

Debt Weight = Total Debt / (Market Capitalization + Total Debt) = 1 - Equity Weight

The Equity Weight represents the proportion of equity-based financing (Market Capitalization), while the Debt Weight represents the proportion of debt-based financing (Total Debt).


Tax Rate

Tax Rate = Income Tax Expense / Income Before Tax

The overall tax rate paid by the company on its earned income.

↳ Beta

Beta

Beta measures the volatility of a stock's price in relation to the overall stock market. A higher beta indicates greater price fluctuations relative to the market.

↳ Risk Free Rate

Risk-Free Rate

The risk-free rate represents the return an investor expects from an absolutely risk-free investment over a specified time period. By default, it is set to the current yield of the U.S. 10-Year Treasury Bond.

↳ Market Premium

Market Premium

The market risk premium represents the additional return over the risk-free rate that investors expect for taking on the risks associated with equities.

Growth In Perpetuity

Growth in Perpetuity

The rate at which the company's free cash flow is assumed to grow indefinitely. By default, this rate equals the yield of the U.S. 10-Year Treasury Bond.

Historical Years

Historical Years

The number of years of historical data used to calculate averages and trends for analysis.

Projection Years

Projection Years

The number of years into the future for which the analysis projects financial performance and metrics.

Revenue Growth Rate

Revenue Growth Rate

The annual growth rate applied to projected revenue, starting from the second projection year onward.

Operating Cash Flow Margin

Operating Cash Flow Margin

Projected Operating Cash Flow = Projected Revenue * Operating Cash Flow Margin

This margin represents the percentage of revenue used to estimate future Operating Cash Flow.

Capital Expenditure Margin

Capital Expenditure Margin

Projected Free Cash Flow = Projected Operating Cash Flow - Projected Revenue * Capital Expenditure Margin

This margin is used to estimate future capital expenditures as a percentage of revenue, which in turn is subtracted from Operating Cash Flow to calculate Free Cash Flow.

Results

Terminal Value 6,742 Bil. USD
Discounted Terminal Value 5,382 Bil. USD
Sum of Discounted Free Cash Flow 73.73 Bil. USD
Enterprise Value 5,456 Bil. USD
Cash and Equivalents 2.26 Bil. USD
Total Debt 167.7 Bil. USD
Equity Value 5,290 Bil. USD
Shares Outstanding 4.22 Bil. USD
Estimated Value per Share 1.25 Thou. USD
Yield of the U.S. 10 Year Treasury Note 4.35%
Average Cash from Operating Activities Margin 26.54%
Average Capital Expenditure Margin 14.59%
Cost of Equity 6%
Equity Weight 52.3%
Cost of Debt 3.96%
Debt Weight 47.7%
Tax Rate 22.1%

Monetary values are in USD

Edit Chart Values 2025 2026 2027 2028 2029

amounts of USD except for #

2024 2025 2026 2027 2028 2029
Revenue 134,788 136,158 136,983 137,814 138,649 139,489
Revenue Growth Rate 0.608% 1.02% 0.606% 0.606% 0.606% 0.606%
Operating Cash Flow 36,912 36,136 36,355 36,576 36,797 37,020
Operating Cash Flow Margin 27.39% 26.54% 26.54% 26.54% 26.54% 26.54%
Capital Expenditure -17,990 -19,866 -19,986 -20,107 -20,229 -20,351
Capital Expenditure Margin -13.35% -14.59% -14.59% -14.59% -14.59% -14.59%
Free Cash Flow 18,922 16,271 16,370 16,469 16,569 16,669
Free Cash Flow Margin 14.04% 11.95% 11.95% 11.95% 11.95% 11.95%
Compounded Discount Rate
2.21% 6.92% 11.85% 17.01% 22.41%
Discounted Free Cash Flow 18,922 15,919 15,310 14,725 14,159 13,618

amounts of USD except for #

Average LTM 2024 2023 2022 2021 2020 2019 2018 2017 2016 2015
Revenue 131,742 135,292 134,788 133,974 136,835 133,613 128,292 131,868 130,863 126,034 125,980 131,620
Revenue Growth Rate 0.606% 0.374% 0.608% -2.09% 2.41% 4.15% -2.71% 0.768% 3.83% 0.043% -4.29% 3.57%
Cost of Revenue 54,405 54,281 54,097 54,887 59,133 56,301 51,201 54,726 55,508 53,063 52,701 52,557
Gross Profit 77,337 81,011 80,691 79,087 77,702 77,312 77,091 77,142 75,355 72,971 73,279 79,063
Gross Margin 58.7% 59.88% 59.87% 59.03% 56.79% 57.86% 60.09% 58.5% 57.58% 57.9% 58.17% 60.07%
Operating Income 28,619 29,143 28,686 22,877 30,467 32,448 28,798 30,378 22,278 27,425 29,249 33,060
Operating Margin 21.73% 21.54% 21.28% 17.08% 22.27% 24.29% 22.45% 23.04% 17.02% 21.76% 23.22% 25.12%
Net Income 18,539 17,783 17,506 11,614 21,256 22,065 17,801 19,265 15,528 30,101 13,127 17,879
Net Margin 14.1% 13.14% 12.99% 8.67% 15.53% 16.51% 13.88% 14.61% 11.87% 23.88% 10.42% 13.58%
Cash from Operating Activities 35,051 37,610 36,912 37,475 37,141 39,539 41,768 35,746 34,339 24,318 21,689 39,027
Cash from Operating Activities Margin 26.54% 27.8% 27.39% 27.97% 27.14% 29.59% 32.56% 27.11% 26.24% 19.29% 17.22% 29.65%
Capital Expenditure -19,241 -17,432 -17,990 -18,767 -26,740 -20,286 -20,318 -18,837 -18,087 -17,830 -17,593 -17,775
Free Cash Flow 15,810 20,178 18,922 18,708 10,401 19,253 21,450 16,909 16,252 6,488 4,096 21,252
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