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DCF Valuation
Base-case fair value
$23.77
Intrinsic $31.69 · 25% MOS
Current price: $29.93
Base-case summary
Our base-case DCF for Warner Music Group Corp. (WMG) projects 10 years of free cash flow growth at 6.0% for years 1–5 and 3.0% for years 6–10, anchored to 6.0% historical FCF growth, then applies a 2.5% perpetual growth rate and a 8.0% discount rate. Starting from $729M in trailing free cash flow, this produces an intrinsic value of $31.69 per share. A 25% safety margin gives a fair value of $23.77, suggesting the stock is currently 21% overvalued against the $29.93 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
$729M
Cash & equivalents
$741M
Total debt
$4.9B
Shares outstanding
375M