LUV — Valuation Models

Interactive models with editable assumptions. All calculations run client-side.

Valuation Summary

Model	Intrinsic Value	vs Price ($47.73)
DCF	$-305.01	-739.0%
Graham Number	$16.59	-65.2%
Reverse DCF	—	—
DDM	$14.83	-68.9%
EV/EBITDA	$48.27	+1.1%

Values reflect default assumptions. Adjust inputs in each model below to update.

1 — Discounted Cash Flow (DCF)

Assumptions

Base FCF($B)Yahoo: -$683.88M

Near-term growth (yrs 1–5)(%)Rev: 7.4% / EPS: 50.8%

Long-term growth (yrs 6–10)(%)

Terminal growth rate(%)

WACC(%)Computed: 8.30%

Computed WACC: 8.30%

Cost of equity (Re)10.32%(Rf 4.30% + β 1.09 × ERP 5.50%)

Cost of debt (Rd)0.00%(no debt / unavailable → 0%)

Tax rate (T)21.00%(US statutory fallback)

Equity weight (E/V)80.50%

Debt weight (D/V)19.50%

Results

Intrinsic Value / share$-352.28

Current Price$47.73

Upside / Downside-838.0%

Net Debt (used)$2.75B

Sensitivity: WACC (rows) × Near-term g (cols)

WACC \ Near-term	42.8%	46.8%	50.8%	54.8%	58.8%
7.0%	$-368.95	$-421.98	$-481.07	$-546.71	$-619.45
8.0%	$-289.23	$-330.46	$-376.40	$-427.43	$-483.96
9.0%	$-234.84	$-268.04	$-305.01	$-346.07	$-391.55
10.0%	$-195.60	$-223.00	$-253.51	$-287.38	$-324.90
11.0%	$-166.11	$-189.16	$-214.82	$-243.30	$-274.83

2 — Graham Number

Assumptions

MultiplierGraham used 22.5 (15× P/E × 1.5× P/B)

EPS (trailing)($)Yahoo: $0.79

Book Value / share($)Yahoo: $15.48

Results

Graham Number$16.59

Current Price$47.73

Margin of Safety-65.2%

Formula: √(22.5 × max(0,EPS) × max(0,BVPS))

3 — Reverse DCF (Implied Growth)

Assumptions

WACC(%)Computed: 8.30%

Terminal growth rate(%)

Computed WACC: 8.30%

Cost of equity (Re)10.32%(Rf 4.30% + β 1.09 × ERP 5.50%)

Cost of debt (Rd)0.00%(no debt / unavailable → 0%)

Tax rate (T)21.00%(US statutory fallback)

Equity weight (E/V)80.50%

Debt weight (D/V)19.50%

Results

Reverse DCF requires positive TTM free cash flow.

Current Price$47.73

Implied Near-term FCF Growth—

Historical Revenue Growth7.4%

Historical Earnings Growth50.8%

Base FCF (TTM)-$683.88M

Implied growth is the FCF growth rate (yrs 1–5) that makes the DCF intrinsic value equal the current price. Long-term growth is set to half the implied near-term rate.

4 — Dividend Discount Model (DDM)

Assumptions

Annual dividend D0($/share)Yahoo: $0.72

Dividend growth rate (g)(%)

Required return (r)(%)

Results

DDM Intrinsic Value / share$14.83

Current Price$47.73

Upside / Downside-68.9%

Formula: D0 × (1+g) / (r − g)

5 — EV/EBITDA Multiple

Assumptions

EBITDA($B)Yahoo: $1.72B

Target EV/EBITDA multipleCurrent: 15.4×

Net Debt($B)Default: $2.75B

Results

Implied Equity Value / share$48.27

Current Price$47.73

Upside / Downside+1.1%

Implied EV$26.47B

Sensitivity: EV/EBITDA multiple (rows) × Net Debt (cols)

Mult \ Net Debt	$750.00M	$1.75B	$2.75B	$3.75B	$4.75B
11.4x	$38.34	$36.30	$34.27	$32.23	$30.20
13.4x	$45.34	$43.30	$41.27	$39.23	$37.20
15.4x	$52.34	$50.30	$48.27	$46.23	$44.20
17.4x	$59.34	$57.31	$55.27	$53.24	$51.20
19.4x	$66.34	$64.31	$62.27	$60.24	$58.20

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