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DCF Valuation
Base-case fair value
$20.21
Intrinsic $26.94 · 25% MOS
Current price: $10.00
Base-case summary
Our base-case DCF for Cerence Inc. (CRNC) projects 10 years of free cash flow growth at 3.8% for years 1–5 and 1.9% for years 6–10, anchored to 3.8% historical FCF growth, then applies a 2.5% perpetual growth rate and a 8.0% discount rate. Starting from $75M in trailing free cash flow, this produces an intrinsic value of $26.94 per share. A 25% safety margin gives a fair value of $20.21, suggesting the stock is currently 102% undervalued against the $10.00 market price.
See 3 scenarios side by side
Conservative, Base, and Optimistic fair values, plus the sensitivity matrix and FCF history. Free account.
Model inputs
TTM Free Cash Flow
$75M
Cash & equivalents
—
Total debt
$188M
Shares outstanding
47M