Webster Financial Corporation (WBS-PF) Nathan Winklepleck, CFA's Nathan's Discounted Free Cash Flow - Discounting Cash Flows
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WBS-PF
Webster Financial Corporation
WBS-PF (NYSE)
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  • Nathan Winklepleck, CFA

  • Webster Financial Corporation Nathan's Discounted Free Cash Flow

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Nathan's Discounted Free Cash Flow Model

The Discounted Free Cash Flow (DCF) model calculates the value of a company by estimating its future Free Cash Flows to the Firm (FCFF) and discounting them to their present value. The value of a share is then derived by adjusting for net debt and dividing by the number of shares outstanding.

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Interactive Assumptions

Discount Rate

Discount Rate

Discount Rate

Discount Rate = 10 Year Treasury Note Yield + 4%
Growth In Perpetuity

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

Historical Years

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

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

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

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

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 105.4 Bil. USD
Discounted Terminal Value 47.43 Bil. USD
Sum of Discounted Free Cash Flow 18.63 Bil. USD
Enterprise Value 66.06 Bil. USD
Cash and Equivalents 370.7 Mil. USD
Total Debt 4.32 Bil. USD
Equity Value 80.09 Bil. USD
Shares Outstanding 160.3 Mil. USD
Estimated Value per Share 499.8 USD
Yield of the U.S. 10 Year Treasury Note 4.31%
Average Cash from Operating Activities Margin 33.65%
Average Capital Expenditure Margin -1.69%

Historical Values

Monetary values in USD

Edit Chart Values 2026-12-31 2027-12-31 2028-12-31 2029-12-31 2030-12-31 2031-12-31 2032-12-31 2033-12-31 2034-12-31 2035-12-31

Forecast Data

Monetary values in USD

amounts except #

2026
Dec 31 		2027
Dec 31 		2028
Dec 31 		2029
Dec 31 		2030
Dec 31 		2031
Dec 31 		2032
Dec 31 		2033
Dec 31 		2034
Dec 31 		2035
Dec 31
Revenue 5,220 6,080 6,990 7,930 8,875 9,798 10,668 11,452 12,120 12,643
Revenue Growth Rate 18.01% 16.49% 14.97% 13.44% 11.92% 10.4% 8.88% 7.35% 5.83% 4.31%
Operating Cash Flow 1,756 2,046 2,352 2,668 2,987 3,297 3,590 3,854 4,078 4,254
Operating Cash Flow Margin 33.65% 33.65% 33.65% 33.65% 33.65% 33.65% 33.65% 33.65% 33.65% 33.65%
Capital Expenditure -88.16 -102.7 -118.1 -133.9 -149.9 -165.5 -180.2 -193.4 -204.7 -213.5
Capital Expenditure Margin -1.69% -1.69% -1.69% -1.69% -1.69% -1.69% -1.69% -1.69% -1.69% -1.69%
Free Cash Flow 1,668 1,943 2,234 2,534 2,837 3,132 3,410 3,660 3,874 4,041
Free Cash Flow Margin 31.96% 31.96% 31.96% 31.96% 31.96% 31.96% 31.96% 31.96% 31.96% 31.96%
Compounded Discount Rate 5.94% 14.75% 24.31% 34.64% 45.83% 57.95% 71.11% 85.33% 100.7% 117.4%
Discounted Free Cash Flow 1,575 1,694 1,797 1,882 1,945 1,983 1,993 1,975 1,930 1,859

Historical Data

Monetary values in USD

amounts except #

Average LTM
Apr 11 		2025
Dec 31 		2024
Dec 31 		2023
Dec 31 		2022
Dec 31 		2021
Dec 31 		2020
Dec 31 		2019
Dec 31 		2018
Dec 31 		2017
Dec 31 		2016
Dec 31
Revenue 2,479 4,423 4,423 4,168 3,943 2,723 1,265 1,287 1,440 1,338 1,173 1,086
Revenue Growth Rate 18.01% 0% 6.13% 5.71% 44.79% 115.3% -1.74% -10.6% 7.64% 14.04% 7.98% 8.9%
Cost of Revenue 748.4 1,734 1,734 1,811 1,442 531.1 -12.74 248.4 237.3 190.5 158.2 159.8
Gross Profit 1,731 2,689 2,689 2,357 2,501 2,192 1,278 1,039 1,203 1,147 1,015 926.6
Gross Margin 76.81% 60.8% 60.8% 56.55% 63.43% 80.5% 101% 80.7% 83.52% 85.76% 86.51% 85.3%
Operating Income 710.8 1,260 1,260 1,017 1,085 798 533.9 280 486.7 441.6 353.8 303.4
Operating Margin 29.73% 28.49% 28.49% 24.4% 27.51% 29.31% 42.2% 21.75% 33.8% 33.01% 30.16% 27.93%
Net Income 556.5 1,003 1,003 768.7 867.8 644.3 408.9 220.6 382.7 360.4 255.4 207.1
Net Margin 23.03% 22.67% 22.67% 18.45% 22.01% 23.66% 32.32% 17.14% 26.58% 26.94% 21.78% 19.07%
Cash from Operating Activities 774.6 1,058 1,058 1,404 978.6 1,336 688.6 380.5 303.9 469.4 445 398.1
Cash from Operating Activities Margin 33.65% 23.92% 23.92% 33.7% 24.82% 49.06% 54.44% 29.56% 21.1% 35.09% 37.93% 36.65%
Capital Expenditure -33.62 -49.57 -49.57 -35.84 -40.3 -28.76 -16.59 -21.28 -25.72 -32.96 -28.55 -40.73
Free Cash Flow 741 1,009 1,009 1,368 938.3 1,307 672 359.3 278.1 436.4 416.4 357.4

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Discounted Cash Flow to Firm - Perpetual Growth

Discounted Cash Flow to Firm - Perpetual Growth

This model estimates the fair value of a share by discounting projected Free Cash Flow to the Firm (FCFF), also known as Unlevered Free Cash Flow.

The terminal value assumes cashflow grows at a constant Growth in Perpetuity rate forever.

Learn more: Prof. Aswath Damodaran's Guide to Discounted Cash Flow Valuation

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Earnings power value is a method of valuing the stocks of a company, assuming that the current earnings are sustainable, and there is no future growth.

The model was developed by Columbia University Professor Bruce Greenwald, a renowned financial economist and value investor who, through this valuation technique, tries to overcome the main challenge in discounted cash flow (DCF) analysis related to making assumptions about future growth, cost of capital, profit margins, and required investments.

Simple Dividend Discount Model

Simple Dividend Discount Model

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Learn more: Prof. Aswath Damodaran's Guide to Dividend Discount Models

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Simple Excess Return Model

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Two-Stage Dividend Discount Model

Two-Stage Dividend Discount Model

This model is only available with a paid subscription plan.

This model is designed to value the equity in a firm, with two stages of growth.

  1. An initial period of high growth, represented by the Sum of discounted dividends.
  2. A subsequent period of stable growth, represented by the Discounted terminal value per share.

Learn more: Prof. Aswath Damodaran's Guide to Dividend Discount Models

Two-Stage Excess Return Model

Two-Stage Excess Return Model

This model is only available with a paid subscription plan.

This model is used to estimate the value of companies based on two stages of growth:

  1. An initial period of high growth, represented by the Sum of discounted excess returns.
  2. A subsequent period of stable growth, represented by the Discounted terminal value.

Note: Excess return models are better suited for estimating the fair value of financial companies compared to enterprise valuation models, such as the Discounted Free Cash Flow Model.

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Discounted Cash Flow to Firm - Exit Multiple

Discounted Cash Flow to Firm - Exit Multiple

This model estimates the fair value of a share by discounting projected Free Cash Flow to the Firm (FCFF), also known as Unlevered Free Cash Flow.

The Exit EV/EBITDA Multiple is applied to the company’s projected EBITDA in the final forecast year to estimate the terminal Enterprise Value (EV).

Learn more: Prof. Aswath Damodaran's Guide to Discounted Cash Flow Valuation

Discounted Future Market Cap

Discounted Future Market Cap

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Peter Lynch Fair Value

Peter Lynch Fair Value

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Peter Lynch Fair Value applies to growing companies. The ideal range for the growth rate is between 10% and 20% a year.

It is computed by multiplying PEG Ratio, which according to Peter Lynch should always equal to 1 (so it can be ignored), EPS LTM, and Earnings Growth Rate. The resulting model value shows whether the company is currently trading at its fair value or not.
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Altman Z-Score

Altman Z-Score

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Read more: Altman’s Z-Score Model

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Beneish M-Score

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Capital Asset Pricing Model (CAPM)

Capital Asset Pricing Model (CAPM)

The Capital Asset Pricing Model describes the relationship between risk and expected return for assets, particularly stocks. Its formula is used to calculate the cost of equity, or the rate of return a company is expected to pay to equity investors.

Margin Analysis

Margin Analysis

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This analysis provides annual and quarterly sections for reporting key financial margins.

Piotroski F-Score

Piotroski F-Score

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The Piotroski score, also known as the Piotroski F-score, is a discrete score that ranges from 0 to 9 and reflects nine criteria that are used to gauge the strength of a firm’s financial position.

Read more: Understanding Piotroski Score

Return on Invested Capital (ROIC)

Return on Invested Capital (ROIC)

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Read more on Aswath Damodaran - Return Measures PDF

Shiller PE (CAPE) Ratio

Shiller PE (CAPE) Ratio

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The CAPE Ratio (also known as the Shiller P/E or PE 10 Ratio) is an acronym for the Cyclically-Adjusted Price-to-Earnings Ratio.

Read more about the CAPE Ratio

Weighted Average Cost of Capital (WACC)

Weighted Average Cost of Capital (WACC)

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Read more: Understanding WACC

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