Terminal Value

AppLovin Corporation (APP)

$36.32

+1.86 (+5.40%)
Growth in perpetuity method:
Long-term growth rate
WACC (%) 2.75
Free cash flow (t + 1) 6,428.76
Terminal Value 857,167.98
Present Value of Terminal Value 748,439.65



Now that we’ve estimated the free cash flow generated over the five-year forecast period, we need to estimate the value of AppLovin Corporation’s cash flows after that period (if we don’t include this, we would have to assume that AppLovin Corporation stopped operating at the end of the five-year forecast period). To do so, we’ll determine the company’s terminal value.